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In a recent World Economic Forum survey, some 41% of companies worldwide said they were expecting to reduce their workforces over the next five years because of the rise of artificial intelligence
The continued job cuts come as companies are under pressure from investors to improve their bottom lines. (Representational Photo: AP)
The US job market is finding it hard to stay resilient, with companies showing early signs of job cuts and layoffs in 2025.
Job cut announcements continued to rise in January, with layoff announcements swelled to 49,795 over the month, according to data from Challenger, Gray and Christmas. That marks a 28% increase from the prior month, though it was the quietest January for layoff announcements since 2022, the report said.
Big tech companies such as Microsoft, Google, Amazon and Meta handed over pink slips to its employees in January. Reports suggest thousands of people have lost their jobs in at least over two dozen firms.
Who Are The Big Companies Laying Off Employees?
Amazon, which had significantly reduced its workforce throughout 2022, 2023 and 2024, announced in January to carry out more layoffs within its communications and sustainability divisions. The exact number of employees affected has not been furnished to the public, however, in an internal memo obtained by CNBC, the quantity has been defined as “small”.
Drew Herdener, head of public relations and corporate responsibility at Amazon, notified employees about the reductions, stating in a memo that the company must remove positions that are “too narrowly coped” or add “unnecessary layers” within the firm. In the past three years, the company has terminated 27,000 employees.
Microsoft, too, had announced similar layoffs, affecting workers in multiple departments who failed to meet the performance standards of the company. Although a spokesperson for Microsoft acknowledged the layoffs, the overall number of employees impacted was not disclosed.
According to Business Insider, citing a source, the layoffs involve employees from Microsoft’s security division. Despite these developments in the company, Microsoft’s India and South Asia head, Puneet Chandok, has confirmed that no such layoffs will affect India’s operations.
Meta CEO Mark Zuckerberg announced removing 3,600 low-performing employees, as per a Bloomberg report. Zuckerberg further said the move is to “raise the bar on performance management and move out low-performers faster.” He said employees will be notified on February 10.
These job cuts are part of what Zuckerberg has called a “challenging year” for the firm and will impact about 5% of Meta’s workforce of 72,400 employees (as of September). Meta has cut over 21,000 workers since 2022.
Meanwhile, a Google spokesperson, quoted by Times Now, said, “The Platforms & Devices team is offering a voluntary exit program that provides US-based Googlers on this team the ability to voluntarily leave the company with a severance package.” This team is responsible for products like Pixel, Android, Chrome, and Nest. This voluntary exit programme comes with a severance package to employees planning on leaving the division.
Workday – a human capital management firm — said on Wednesday it will cut around 1,750 jobs, or 8.5% of its current workforce, as it invests heavily in artificial intelligence to counter a softer macroeconomic environment. Workday CEO Carl Eschenbach said the layoffs are necessary to prioritize investments such as artificial intelligence.
“I realise this is tough news, and it affects all of us—the Workmates who are leaving and those who’ll continue with us. I encourage you to work from home or head home, if you’re already in the office,” Eschenbach said as per USA Today. As of January 31 last year, the company had laid off around 18,800 employees.
The Washington Post said in January it would lay off about 4% of its workforce or less than 100 employees in a bid to cut costs, as the storied newspaper grapples with growing losses, reported Reuters. The newspaper is making changes across several business functions, a spokesperson said, while suggesting the job cuts will not impact its newsroom. The Post has seen a decline its digital readership and reported a $77 million loss in 2023.
Why Is This Happening?
While different companies have stated different reasons for cutting jobs, but cost-cutting measures have been common amid a backdrop of technological change.
In a recent World Economic Forum survey, some 41% of companies worldwide said they were expecting to reduce their workforces over the next five years because of the rise of artificial intelligence.
Jamie Dimon, CEO of JPMorgan, said, “AI is likely to make dramatic improvements in workers’ quality of life, even if it eliminates some positions.”
Eric Brown, CEO of Imperio Consulting, explained the layoff situation. “Tech and consumer-focused sectors often feel the brunt of market volatility first. When budgets shrink, businesses curb spending on new tools and marketing. Companies with direct exposure to tight capital markets are more likely to see employees facing the chop.”
But If US Economy Is Booming, Why Are Layoffs Happening?
The US economy added 353,000 jobs in January, about twice what economists had expected. And yet, Google, Amazon, Microsoft, Discord, Salesforce and eBay all made significant cuts in January, and the layoffs don’t seem to be abating.
According to a report by The Washington Post, the continued job cuts come as companies are under pressure from investors to improve their bottom lines. Wall Street’s sell-off of tech stocks in 2022 pushed companies to win back investors by focusing on increasing profits, and firing some of the tens of thousands of workers hired to meet the pandemic boom in consumer tech spending.
With many tech companies laying off workers, cutting employees no longer signaled weakness. Now, executives are looking for more places where they can squeeze more work out of fewer people.
Economic concerns and inflation in 2022 and 2023 also cut into the amount of software and cloud services that businesses were buying, the report added.
Reports suggest some of the more recent layoffs are targeting middle-managers who ran the teams that were hit in previous waves of cuts. Some of them are trying to return to jobs where they write code rather than direct the work of others.
