The job market in 2025 has been significantly shaped by widespread layoffs, with numerous major corporations announcing substantial workforce reductions. Artificial intelligence has emerged as a prominent factor, cited as the driver behind a considerable portion of these cuts.
According to Challenger, Gray & Christmas, AI was implicated in nearly 55,000 layoffs across the U.S. this year. Cumulatively, job cuts reached 1.17 million through 2025, marking the highest total since 2020, when the COVID-19 pandemic triggered 2.2 million announced layoffs. In October alone, U.S. employers announced 153,000 job cuts, followed by over 71,000 in November, with AI being specifically mentioned for over 6,000 of those reductions.
In an environment marked by persistent inflation and rising expenses due to tariffs, companies are increasingly turning to AI as a strategic solution for cost reduction. A November study by the Massachusetts Institute of Technology highlighted AI’s current capability to perform the tasks of 11.7% of the U.S. workforce, potentially saving up to $1.2 trillion in wages across sectors like finance, healthcare, and professional services.
However, not all experts are convinced that AI is the sole, or even primary, reason for the dramatic surge in job cuts. Some analysts suggest that AI might serve as a convenient justification for other underlying economic factors. Fabian Stephany, an assistant professor at the Oxford Internet Institute, previously noted to CNBC that many companies that experienced significant growth during the pandemic may have engaged in “overhiring.” Consequently, the current layoffs could be viewed as a form of “market clearance,” where companies address past miscalculations in staffing rather than solely reacting to AI advancements. Stephany posited that instead of admitting to misjudgments made years prior, companies might be opting to “scapegoat” AI.
Several prominent firms have explicitly cited AI as a component of their layoff and restructuring strategies in 2025:
### Amazon
In October, Amazon announced its largest-ever round of layoffs, impacting 14,000 corporate roles. The company stated this move was part of its strategy to invest more heavily in its “biggest bets,” including artificial intelligence. Beth Galetti, senior vice president of people experience and technology at Amazon, explained in a blog post that “This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before… we’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.” Amazon CEO Andy Jassy had previously indicated that AI would lead to a workforce reduction, with the need for fewer employees in certain roles and a greater demand for others.
### Microsoft
Microsoft has reduced its workforce by approximately 15,000 jobs through 2025. In July, the company implemented another round of cuts affecting around 9,000 roles. CEO Satya Nadella communicated to employees that the company needed to “reimagine” its mission for a new era, emphasizing the pivotal role of AI. He stated, “What does empowerment look like in the era of AI? It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools. That’s the shift we are driving — from a software factory to an intelligence engine empowering every person and organization to build whatever they need to achieve.”
### Salesforce
While specific details on Salesforce’s AI-driven layoffs are less prominently detailed in public statements compared to other tech giants, the company has undergone restructuring in recent years. Marc Benioff, the CEO, has consistently championed AI as a core component of Salesforce’s future strategy, integrating AI capabilities across its customer relationship management platform. The company’s emphasis on AI innovation suggests a strategic reallocation of resources, which may include workforce adjustments to align with evolving technological demands.
### IBM
IBM’s CEO Arvind Krishna indicated in May that AI chatbots had begun to automate tasks previously handled by several hundred human resources employees. Krishna acknowledged that while AI was displacing some roles, IBM was simultaneously increasing hiring in areas requiring higher-order thinking, such as software engineering, sales, and marketing. In November, IBM announced a global workforce reduction of 1%, potentially affecting nearly 3,000 employees, a move that aligns with a broader industry trend of optimizing operations through technological integration.
### Crowdstrike
Cybersecurity firm CrowdStrike announced in May that it was laying off 5% of its workforce, approximately 500 employees, directly citing the impact of AI. Co-founder and CEO George Kurtz stated in a memo included in a securities filing, “AI has always been foundational to how we operate. AI flattens our hiring curve, and helps us innovate from idea to product faster. It streamlines go-to-market, improves customer outcomes, and drives efficiencies across both the front and back office. AI is a force multiplier throughout the business.”
### Workday
In February, HR platform Workday became one of the earlier companies this year to announce significant workforce reductions, cutting 8.5% of its staff, totaling around 1,750 jobs. CEO Carl Eschenbach explained that these layoffs were necessary to prioritize investments in AI and to reallocate resources. The company’s strategic focus on AI development and integration into its human capital management solutions necessitates a dynamic approach to workforce planning and resource allocation.
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