{"id":378594,"date":"2026-04-06T22:45:07","date_gmt":"2026-04-06T22:45:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/378594\/"},"modified":"2026-04-06T22:45:07","modified_gmt":"2026-04-06T22:45:07","slug":"tech-companies-are-cutting-jobs-and-betting-on-ai-the-payoff-is-far-from-guaranteed-ai-artificial-intelligence","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/378594\/","title":{"rendered":"Tech companies are cutting jobs and betting on AI. The payoff is far from guaranteed | AI (artificial intelligence)"},"content":{"rendered":"

Hundreds of thousands of tech workers are facing a harsh reality. Their well-paying jobs are no longer safe. Now that artificial intelligence<\/a> (AI) is here, their futures don\u2019t look as bright as they did a decade ago.<\/p>\n

As US tech companies have ramped up investments in AI, they\u2019ve slashed a staggering number of jobs. Microsoft cut 15,000 workers last<\/a> year<\/a>. Amazon<\/a> laid off 30,000 employees in the last six months. Financial-services company Block eliminated<\/a> more than 4,000 people, or 40% of its workforce, in February. Meta<\/a> laid off more than 1,000 in the last six months, and, according to a Reuters report, may cut 20% of all employees in the near future<\/a>. Just this week, the software giant Oracle laid off thousands<\/a> of workers. Smaller players like Pinterest<\/a> and Atlassian<\/a> also made recent cuts, culling about 15% and 10% of their workforces, respectively. Estimates put the total number of tech layoffs in the past year at more than 165,000, according to the tracker Layoffs.fyi<\/a>.<\/p>\n

\u201cAt no point in my career have I ever been this pessimistic about the future of careers in tech,\u201d said a tech employee, who has worked at big tech companies for decades and requested anonymity for fear of retribution. \u201cAnd that\u2019s really sad because I love tech.\u201d<\/p>\n

The anxiety extends<\/a> beyond Silicon Valley. Because tech companies are seen as innovators of the corporate world, as they reduce their headcounts \u2013 in anticipation of AI efficiency gains, or to prioritize AI investments \u2013 the moves could set a precedent for other businesses to make similar cuts.<\/p>\n

But even though AI has helped to accelerate coding, analyze large datasets and aid with research, many AI experts say we\u2019re still a long way from AI being able to replace large swaths of the workforce, if it ever can. So what is really going on?<\/p>\n

Microsoft cut 15,000 workers last year. Photograph: David Ryder\/Getty Images<\/p>\n

In interviews over the last month, AI researchers, economists and tech workers said that essentially, we\u2019re all living through an experiment. Over the next few years, tech companies\u2019 experimentation with AI will probably lead to several critical outcomes: more job cuts across industries, unforeseen consequences from overreliance on AI and a fundamentally different model of work.<\/p>\n

\u201cThe maximum hype you have right now, which is that AI is replacing people, is not true,\u201d said Ethan Mollick, an associate professor at the Wharton School of the University of Pennsylvania who studies AI. \u201cBut it\u2019s also not true that AI will never threaten jobs. It\u2019s going to be complicated.\u201d<\/p>\n

Reshaping jobs<\/p>\n

OpenAI, Anthropic and Google<\/a> have promised that their generative AI tools, such as ChatGPT, Claude and Gemini, will change the way people do their jobs, automating time-consuming tasks and shifting humans to more complex work. Agentic AI, or bots that complete tasks without human intervention, takes that promise further, potentially automating entire roles or business functions.<\/p>\n

On the ground floor, tech workers are facing the first phase of the AI experiment, as they\u2019re pushed to use the tech more often. But the outcomes don\u2019t always align with leaders\u2019 expectations.<\/p>\n

For technical workers, using AI has become a baseline expectation for employers across the tech industry, said a former Block engineering supervisor who got laid off in February.<\/p>\n

AI helps generate code faster, but this makes keeping up with code reviews more difficult, he said. Human reviews are important to think through any potential conflicts the code may have with other parts of the system and spot bugs that AI makes look legitimate, he added.<\/p>\n

\u201cNow there\u2019s three times as much code because it\u2019s producing faster,\u201d he said. \u201cWe were falling behind on reviews.\u201d<\/p>\n

A recently laid off senior user-experience designer at Amazon<\/a> Web Services, who asked to remain anonymous for fear of retribution, said his team was experimenting with two internal generative AI tools core to their jobs, both of which were in early testing phases. Neither was fully functional or useful for workers\u2019 jobs yet, he said. So when cuts hit his team, he was surprised and confused.<\/p>\n

\u201cIt felt like, \u2018None of this is ready yet,\u2019\u201d he said. \u201cHow is all this work going to get done?\u201d<\/p>\n

Amazon employees felt a veiled threat that if they did not use AI, their jobs could be next, he said, echoing earlier reporting from the Guardian that employees say the tech company pressures them to use AI even when it slows them down<\/a>. Amazon stressed in previous statements that AI use was not mandatory.<\/p>\n

As tech companies reduce headcount \u2013 in anticipation of AI efficiency gains, or to prioritize AI investments \u2013 the moves could set a precedent for other businesses to make similar cuts. Photograph: Justin Sullivan\/Getty Images<\/p>\n

As more tech workplaces center AI and urge employees to embrace it \u2013 sometimes that push comes with surveillance and enforcement.<\/p>\n

A former worker at Microsoft<\/a> said when it came to his and his colleagues\u2019 AI use, he had the \u201cfeeling of being watched\u201d and felt pressure to \u201cadopt the tech whether we like it or not\u201d. He also requested anonymity for fear of retribution. He felt he could voice concerns about AI at work if it helped protect the company from a bad outcome, but larger societal worries were less welcome.<\/p>\n

\u201cI can\u2019t bring up environmental or job concerns,\u201d the worker said. \u201cYou don\u2019t want to be known as the person against AI.\u201d<\/p>\n

Microsoft said it maintained system\u2011level oversight of AI usage for security and risk but didn\u2019t use individual usage as a performance metric. The company also said it offered multiple channels for employees to anonymously raise concerns about how the tech was used.<\/p>\n

The power of AI<\/p>\n

Some companies are already touting the gains they\u2019ve seen from AI. Google, for example, credited AI for 50% of its code in its latest earnings report. Block\u2019s head of engineering, at the company\u2019s November investor day, said 90% of the company\u2019s code submission was authored \u201cpartially or fully with AI support\u201d.<\/p>\n

However, in its current form, AI is not as capable as some of the hype suggests, said Stephan Rabanser, a post-doctoral researcher at Princeton University who has co-written a white paper<\/a> about the reliability of AI agents. While the output of generative tools has been improving over the years, the tech still has problems consistently producing the same correct answer, even when the same prompt is used. That especially gets messy when there are different users or conditions, Rabanser said.<\/p>\n

\u201cThis is the barrier to job transformation,\u201d he said. \u201cReliability will be a key limiting factor.\u201d<\/p>\n

More companies will probably experience failed AI deployments or problematic results, Rabanser said.<\/p>\n

AI systems need huge amounts of data to become even acceptably good at a task, said Stuart Russell, a University of California, Berkeley, professor and an AI researcher, , and high-quality training data is becoming scarce. Often, even when a chatbot lacks the necessary data, it will respond confidently anyway, producing wrong answers that can lead to faulty transactions and deleted databases, he added.<\/p>\n

AI also struggles to learn continually and remember what it did previously, Mollick, of Wharton, said. Nevertheless, some companies are already adopting advanced-use cases, relying on AI to write all their code and then shipping those products without human review, despite the risk from AI\u2019s limitations, he said. He called them \u201cdark factories\u201d, since they operate largely without human supervision.<\/p>\n

Betting on AI like this is risky. It creates exposure to financial losses, reputational harm, and negative customer or client outcomes, according to AI and business experts.<\/p>\n

Amazon laid off 30,000 employees in the last six months. Photograph: Bloomberg\/Getty Images<\/p>\n

In some cases, over relying on AI can cause critical consequences far beyond the business. \u201cWe don\u2019t want to move fast and break things in high-risk situations, like in healthcare or judicial fields,\u201d Rabanser said. \u201cThere are high stakes involved\u201d that in some cases could mean life or death, he added.<\/p>\n

The truth behind the cuts<\/p>\n

While the drumbeat of companies that say AI will help them do more with less is getting louder, it\u2019s unclear whether AI is actually driving cuts. Some companies may be \u201cAI-washing\u201d layoffs, using the technology as a convenient excuse for a slowing labor market, lagging consumer demand or rising costs, researchers and AI experts said.<\/p>\n

Just this week, the prominent venture capitalist Marc Andreessen, a bona fide AI booster<\/a> who has written that \u201cAI will save the world,\u201d said on a podcast<\/a> that large tech companies were culling workers because they were overstaffed, and \u201cnow they all have the silver-bullet excuse: ah, it\u2019s AI.\u201d<\/p>\n

\u201cIt\u2019s easy to confuse the effects of something like generative AI with a weakening of the labor market,\u201d said Ryan Nunn, director of research at Yale University\u2019s Budget Lab, which researches AI\u2019s impact on jobs. \u201cWe really don\u2019t see anything differentially happening with the AI-exposed labor market.\u201d<\/p>\n

If a company is struggling financially, saying AI drove cuts definitely makes for a better story, said Thomas Malone, professor of information technology at the Massachusetts Institute of Technology\u2019s Sloan School of Management.<\/p>\n

There\u2019s also a long history of overshooting predictions of the impact and adoption rate of new tech, he said. It happened in the dot-com era and with autonomous driving.<\/p>\n

\u201cI do think many people are overestimating the rate at which jobs will change,\u201d Malone said about AI projections.<\/p>\n

Pinterest recently laid off 15% of its staff members. Photograph: Bloomberg\/Getty Images<\/p>\n

When Pinterest<\/a> announced an almost 15% cut of its workforce in January, it cited reasons including reallocating resources to teams focused on AI and prioritizing AI\u2011powered products and capabilities. But a Pinterest employee, who asked for anonymity because she was not authorized to speak to the press, said she believed the layoffs were more about fixing the company\u2019s business than anything else.<\/p>\n

\u201cWhile I know that AI was one of the reasons cited, I don\u2019t think it was the real reason,\u201d she said, adding that cuts were related to optimizing operations. \u201cThey did a thorough review of the entire business, and what you see now is a sort of leaner, meaner Pinterest.\u201d<\/p>\n

Pinterest called this a mischaracterization.<\/p>\n

The potential savings and competitive advantages of AI are compelling for Wall Street investors. Headcount reductions can imply greater productivity per employee, which then leads to higher profits, said Joseph Feldman, analyst at Telsey Advisory Group.<\/p>\n

After Jack Dorsey<\/a>, Block\u2019s CEO, connected his company\u2019s layoffs directly to AI productivity gains, the company\u2019s stock price increased by 20%.<\/p>\n

But cuts alone don\u2019t always satisfy the market, which is also watching for signs of sustainability, several analysts said. Two weeks after the initial pop in price, Block\u2019s stock was down 6%, signaling that the market recognized the execution risk, said Matthew Coad, analyst at Truist Securities.<\/p>\n

\u201cA big part of it is the uncertainty around, \u2018Did [Dorsey] cut into bone?\u2019\u201d Coad said, referring to the engineering staff.<\/p>\n

And in the day after Oracle\u2019s layoff news, the company\u2019s stock popped up by 7.5%. But the boost was short-lived, as days later the stock had retreated to near pre-layoff levels. Amazon similarly experienced a stock pop after its latest cuts in January, though stock has since dropped in the months following as the market questions its AI spending plans.<\/p>\n

Even the markets are trying to make sense of the hype surrounding AI. For those seeking a clear answer on exactly how this tech will transform work and the economy, the answer is yet to be determined. This tech is changing some jobs, but the greater impact will take years to play out.<\/p>\n

\u201cWe will see changes over the next couple of years as a result of AI,\u201d Mollick said, referring to anticipated improvements in the tech. \u201cIt\u2019s already changing programming. So it will change jobs and transform them, but we just don\u2019t know the job consequences yet.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Hundreds of thousands of tech workers are facing a harsh reality. Their well-paying jobs are no longer safe.…\n","protected":false},"author":2,"featured_media":378595,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46],"class_list":{"0":"post-378594","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-il","10":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/378594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=378594"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/378594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/378595"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=378594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=378594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=378594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}