AI-driven layoffs are gaining momentum
In a significant shift, major tech companies like Microsoft, Intel, and BT are slashing their workforce despite recording increased profits and strong financial performance, primarily to restructure their operations, cut costs, and adapt to the changing market demands driven by AI and economic shifts.
Microsoft, for instance, has let go of over 15,000 employees in 2025, including 9,000 job cuts at the start of its 2026 fiscal year. The tech giant's CEO, Satya Nadella, describes these cuts as part of a strategic realignment to focus on long-term goals amid a rapidly evolving tech landscape and to invest heavily (around $80 billion) in AI infrastructure.
Intel, on the other hand, plans to cut around 24,000 to 30,000 jobs by the end of 2025 as part of a large-scale restructuring. The goal is to become a more competitive, efficient company after overexpansion and to better match current demand. Intel's new CEO emphasizes building a "faster-moving, flatter, and more agile organization" despite recent losses.
BT, along with other tech and telecom companies like Telstra, has also cut jobs in 2025, reflecting the broader industry trend where AI adoption is reshaping workforce priorities across sectors. These companies are focusing on automating roles and optimizing teams to align with new technology demands.
The layoffs are not just limited to these companies. The current situation indicates a potential decrease in work for employees in the future, with companies continuing to pursue a leaner workforce, with AI playing a role in this process. The layoffs are being considered by executives as a sign of progress towards greater profits with a leaner workforce.
AI is contributing to the redesign of jobs, as claimed by business leaders. Companies are not just focusing on doing more with fewer people; they are eliminating inefficiencies to achieve a leaner workforce. In times of economic uncertainty, companies are pruning excesses, and the implementation of AI is leading to changes in the workforce, including job losses.
However, the layoffs are not a reflection of current financial performance. Instead, they are part of strategic realignments to become leaner and more agile organizations positioned for a future heavily influenced by AI. For instance, Microsoft's market valuation reached US$4 trillion last week, yet the company is reducing its workforce by the thousands.
These workforce reductions reflect the companies’ efforts to pivot towards AI-enhanced business models, drive efficiency, and allocate resources towards future growth areas, even if that means temporary contractions in headcount amidst financial success. The layoffs are a necessary step towards building a future-ready workforce that can thrive in the AI-driven landscape.
Artificial-intelligence's influence is driving finance sector businesses like Microsoft to make significant changes, with Satya Nadella commenting on Microsoft's decision to reduce its workforce by thousands, investing heavily in AI infrastructure.
Intel, aiming to become more competitive and efficient, plans to cut around 24,000 to 30,000 jobs, emphasizing the need for a faster-moving and leaner organization in the face of advancements in technology.
