Tech leaders like Google DeepMind’s Demis Hassabis and Tesla CEO Elon Musk have described AI as a win-win game for society; They make ambitious promises that advanced technology will boost the workforce, cure cancer, and create new “high-paying, super-interesting jobs” that didn’t exist before.
But instead of feeling empowered, many workers fear their jobs are at risk from automation — and the flurry of layoffs in 2025 has confirmed those suspicions.
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A staggering total of 1.2 million U.S. job cuts were announced last year, up 58% from the roughly 760,000 layoffs in 2024, according to a recent report from employment consultancy Challenger, Gray & Christmas.
In fact, 2025 saw the highest level of workforce reductions since 2020 and went hand in hand with the 2008 financial crisis when 1.22 million jobs were eliminated.
The biggest victims of last year’s bloodbath of personnel cuts were federal employees. Extreme cost-cutting efforts by Elon Musk’s Doge have paralyzed entire agencies, including USAID, the Department of Education, and the Department of Health and Human Services. In total, about 308,000 government jobs were cut last year.
In the private sector, the technology sector suffered the hardest blow. Last year, the area announced that around 154,000 roles would be eliminated, a 15% increase compared to the almost 134,000 cuts in 2024. The culprit? The rapid implementation of AI — and the industry’s self-correction from pandemic-era over-hiring. In 2025, AI was responsible for 54,836 layoff plans in total; since 2023, the technology has been linked to 71,825 job cut announcements.
“Technology has moved toward both the development and implementation of artificial intelligence much more quickly than any other sector,” the report noted. “This, coupled with excessive hiring over the past decade, has created a wave of job losses in the industry.”
Technology companies are reducing vacancies — especially for generation Z
At a time when the technology sector is growing rapidly and companies are racing to win the AI race, it may seem counterintuitive that trillion-dollar innovators are laying off talent. But CEOs have been outspoken about how AI tools are taking over human skills and preparing for more changes in the workforce.
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Microsoft laid off 6,000 employees last May and carried out another round of 9,000 cuts in July. Meanwhile, its CEO, Satya Nadella, announced that AI already writes 20% to 30% of the company’s code; a technology so powerful that the business is financing an $80 billion investment in AI infrastructure.
Early last year, Meta also announced a 5% reduction in staff — affecting around 3,600 employees — in an attempt to “displace low performers more quickly,” according to CEO Mark Zuckerberg.
This came as the tech billionaire admitted that AI was on the verge of “effectively becoming a kind of mid-level engineer.”
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Amazon CEO Andy Jassy also acknowledged in a memo sent to employees last year that the company “will need fewer people doing some of the jobs that are done today.” Just a few months later, Reuters reported that Amazon plans to cut up to 30,000 jobs.
While layoffs in technology are nothing new, early-career employees — who already face challenges getting off the ground professionally — will likely feel the impact of AI-related workforce changes the most.
The percentage of employees aged 21 to 25 has halved at technology companies over the past two years, according to 2025 data from compensation management software company Pave.
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As of January 2023, these Gen Z employees represent 15% of the workforce at large publicly traded technology companies; in August 2025, they represented just 6.8%.
The situation is also not encouraging in large privately held technology companies — in the same period, the proportion of young Gen Z people at the beginning of their careers fell from 9.3% to 6.8%.
“If you’re 35 or 40 and very established in your career, you have skills that you know can’t yet be replaced by AI,” Matt Schulman, founder and CEO of Pave, told Fortune last year.
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“There’s still a lot of human judgment when operating at more senior levels. If you’re a 22-year-old who used to be addicted to Excel or something like that, that can be replaced. So it’s almost like it’s two different worlds.”
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