US Tech Companies Accelerate Layoffs as AI Investment Grows

The US tech sector is again the main source of new layoffs: companies are cutting staff faster than they can explain how, exactly, artificial intelligence is supposed to make the business more efficient. In March, tech companies announced 18,720 job cuts, enough to put the industry at the top of new US layoff plans for the second month running. For the market, this is no longer a one-off round of streamlining but a lasting pattern: businesses keep investing in AI while making their teams smaller.

Across the whole US economy, employers announced 60,620 cuts in March. That is roughly 25% more than in February, though well below the extreme level of a year earlier, when mass layoffs in the public sector inflated the figures. Within that overall picture, however, tech companies stand out. Their March result was more than 24% higher than a year ago, and across the first quarter the number of announced layoffs in the industry reached 52,050. That is roughly 40% more than in the same period of 2025 and the highest quarterly figure for the sector since 2023.

Still, the overall labor market picture does not look like a return to the panic of 2022–2023. In the first quarter, US employers announced 217,362 cuts, which is lower than in the same period last year and the calmest start to a year since 2022. In other words, the US economy as a whole has not slid into a large-scale collapse in employment. But against this calmer baseline, the technology sector increasingly stands out as the place where workforce restructuring is moving faster than in other industries. After tech, transportation and healthcare have the most cuts this year, but IT remains the main testing ground for the hypothesis that AI lets companies do more with fewer people.

The key shift is that artificial intelligence has stopped being merely a topic for presentations and has become a direct argument for revisiting headcount. In March's data, AI was cited as the reason for 15,341 layoffs, roughly a quarter of all US job cuts that month. Since the start of 2026, 27,645 layoffs have been linked to AI, and 99,470 since 2023. The companies' logic is clear: if some tasks can be automated, sped up or handed to a smaller team with new tools, management starts to look differently at the number of developers, analysts, support specialists and back-office staff.

It matters that this involves not only startups living in permanent cost-saving mode but also large players. Dell Technologies, Oracle and Meta Platforms* were among the companies that announced cuts in recent months. Officially, the reasons may differ: restructuring in some cases, shifting priorities in others, reallocating investment elsewhere. But the overall direction is the same: money is flowing into data centers, compute infrastructure, models, licenses and the rollout of AI services, not into linear headcount growth. In corporate budget terms, this means moving spending from payroll into technology that is supposed to deliver more output per employee.

The labor market is not shrinking across the board, though. In March, employers also announced 32,826 hiring plans, 157% more than a month earlier and almost 2.5 times more than a year ago. In other words, companies are not simply laying people off; they are changing the composition of their teams. Demand is shifting toward roles tied to automation, infrastructure, security, data management and embedding AI into business processes. The problem is that the transition is asymmetric: the positions that disappear and the ones that appear rarely match in skills, pay level or retraining speed.

For the tech sector, this means AI increasingly works not as an abstract driver of growth but as a tool of financial discipline. It gives companies a reason to remove duplicated functions, speed up development and demand more from smaller teams. For employees, the signal is harsher still: even in an industry that builds AI products, the technology agenda no longer guarantees protection from layoffs. The next stage of competition will be not only between companies but between specialists who know how to work alongside AI and those whose tasks AI has already begun to replace.

*Meta is designated an extremist organization and banned in Russia.