When we hear about layoffs by massive companies, our first intuition is usually to blame synthetic intelligence (AI) — particularly when it comes to Big Tech companies.
In Q1 2026, 86 tech companies laid off over 80,000 workers. That’s fairly the soar from Q1 2025, when 103 tech companies laid off round 30,000 employees. It’s additionally the best variety of layoffs in three years. (1)
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The thought that AI is to blame for these job losses did not come from nowhere; CEOs are actively citing AI because the trigger. In March, AI was claimed to be the main cause for layoffs within the U.S., making up 25% of all job cuts. In 2026, it is supposedly the explanation behind 13% of all layoffs to date. (2)
But this might not be totally correct. A distinct motivation might be behind job cuts, and maybe AI is simply the scapegoat.
Big Tech is participating in huge layoffs — and blaming AI
On Thursday, April 23, Meta introduced in an inner assembly that it deliberate to lay off 10% of its employees in May. Three sources on the decision instructed Business Insider that the corporate mentioned it was open to slicing much more jobs sooner or later. (3)
The similar day, Microsoft despatched employees an inner memo that supplied voluntary buyouts. Around seven % of its workers are eligible for this system.
Other tech companies that have cut jobs in 2026 embrace Eventbrite, Oracle, Quora, and Spotify, to identify a few. (1)
Plenty of companies. Plenty of layoffs. And many of those organizations are blaming job cuts on AI.
“Almost every company that does layoffs is blaming AI, whether or not it really is about AI,” Sam Altman, CEO of OpenAI, mentioned at BlackRock’s US Infrastructure Summit in March (4). Using AI as an excuse for shedding employees has been referred to as “AI washing.” (5)
Some CEOs are at the least considerably trustworthy.
“Since it’s a thing now, I should note that the layoffs aren’t related to AI,” Tim Sweeney, CEO of Epic Games, mentioned in a March be aware to his workers that introduced the corporate would cut greater than 1,000 jobs. (6)
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The true culprits behind tech layoffs
In a March interview with 20VC, businessman and enterprise capitalist Marc Andreessen mentioned that, whereas many layoffs are blamed on AI, there are two different primary causes. The first is that the federal funds fee was cut to 0% due to the COVID-19 pandemic, then the Fed shortly hiked the speed till it was over 5% in 2023. (7)
So, all massive companies’ prices elevated considerably, and that they had to restructure their funds.
The second large issue? Overhiring throughout the pandemic.
“The hiring binge that companies went on in COVID was wild, right?” Andreessen mentioned. “And it was the combination of the two. It was the interest rates going to zero during COVID, and then it was just the complete loss of discipline at all these companies when they went virtual.”
Andreessen thinks a lot of enormous companies are overstaffed due to this era of overhiring — by 25% to 75%.
“Now they all have the silverbullet excuse,” he mentioned. “‘Ah, it’s AI!'”
What to do should you get caught within the Big Tech-AI crossfire
If you’ve got been let go, the explanation would not make a lot of a distinction. You’re nonetheless out of a job. Thankfully, you’ll be able to set your self up for monetary success by taking a number of steps early in your unemployment.
If you have been laid off, not fired, you in all probability obtained a severance package deal. Before the funds hit your checking account, assessment the phrases so you understand how a lot cash to count on. Then, make a plan for a way you’ll use the money.
Do you have got an emergency financial savings fund? This is precisely the time to faucet into it. Between an emergency fund and a severance package deal, chances are you’ll be financially safe sufficient that you do not have to panic about discovering your subsequent job instantly. This offers you extra time to breathe, buff up your resume, and job hunt.
You ought to, nonetheless, instantly file for unemployment.
“Most states don’t backdate benefits, so your eligibility clock starts the day you file,” Caroline Vernon, Vice President of Coaching Development and Engagement at INTOO, instructed Reader’s Digest. “Regardless if you feel you will land back on your feet quickly, you make too much money or you don’t need it, you should still file for unemployment. It’s insurance you have paid for.” (8)
Along with offering cash, your native unemployment workplace must also present sources for job searching, writing a cowl letter, and interviewing for positions.
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Article Sources
We rely solely on vetted sources and credible third-party reporting. For particulars, see our ethics and guidelines.
Layoffs.fyi (1); Challenger, Gray & Christmas (2); Business Insider (3); YouTube (4),(7); Fortune (5); Epic Games (6); Reader’s Digest (8)
This article initially appeared on Moneywise.com beneath the title: Big Tech cut 80,000 jobs and blamed AI — Experts say a real problem is that companies are 25% to 75% overstaffed
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