Workforce Reduction

IBM will reduce its global workforce by a low single-digit percentage in Q4, impacting around 2,700 positions. This realignment, driven by advancements in AI, mirrors similar moves by other tech giants like Amazon and Meta. Despite the cuts, IBM anticipates flat U.S. employment year-over-year. The company reported strong earnings and is actively diversifying into cloud computing, AI, and consulting under CEO Arvind Krishna, who has emphasized AI’s role in optimizing workflows. Previous staff reductions occurred in marketing and communications in March 2024.

Amazon plans to reduce its corporate workforce by roughly 14,000 employees, driven by cost-cutting strategies and a focus on generative AI. This significant reduction, impacting various divisions, aims to create a leaner, faster-innovating organization. Amazon is reallocating resources towards AI development and cloud infrastructure, reflecting a company-wide shift towards AI-driven operations and a strategic adjustment to evolving market dynamics and heightened competition in the tech sector. This follows similar moves by other tech giants adapting to AI advancements.

Chegg (CHGG) is restructuring due to AI disruption and declining organic search traffic, laying off 45% of its workforce (388 employees). The company cites the rise of AI platforms like ChatGPT and Google’s AI-driven search summaries as drivers of revenue decline. CEO Dan Rosensweig returns as Chegg pivots toward AI integration in its offerings. Chegg, after a strategic review, will remain an independent public company, believing this maximizes long-term shareholder value. Previous layoffs occurred in May.

Meta is reducing its risk organization workforce, shifting towards AI-driven automation for compliance reviews. This follows a $5 billion FTC fine and aligns with broader workforce adjustments, including layoffs in the Superintelligence Labs AI unit. Meta emphasizes that AI aims to streamline processes and augment human capabilities, not replace judgment. The company says AI will automate applying rules and not make the decision on risk itself. This move mirrors similar strategies at companies like JPMorgan and Salesforce, raising questions about AI’s impact on the job market.

Applied Materials (AMAT) is cutting 4% of its global workforce, approximately 1,444 positions, as part of a strategic realignment. The move aims to boost competitiveness amidst evolving market dynamics and reflects pressures in the semiconductor supply chain. This restructuring follows a forecasted $600 million revenue impact in fiscal 2026 due to U.S. export restrictions. The company expects to incur $160-$180 million in charges for severance costs but anticipates long-term gains through optimized operations and increased efficiency via automation and digitization.

Google has reduced its management ranks by 35%, aiming for a more efficient, streamlined organization. This shift involves managers overseeing small teams transitioning to individual contributor roles. Executives addressed employee concerns about job security and workload during an all-hands meeting. Voluntary exit programs have been offered in multiple product areas, with employees citing a desire for career breaks as a key reason for acceptance. Google is focused on optimizing resources and efficiency, resisting comparisons to Meta’s sabbatical policy.

Microsoft announced its second major workforce cut this year, eliminating approximately 9,000 jobs (under 4% of its workforce) to streamline operations, with controversy erupting over revoked unvested stock awards from laid-off employees. Former Xbox developer Noble Smith criticized the policy as stripping potential family education funds, sparking debate on compensation ethics during layoffs. Analysts note competitors sometimes accelerate vesting as goodwill, while Microsoft’s stock clawbacks amid record share prices could save hundreds of millions. The dispute underscores tensions between cost-cutting measures, employee retention, and transparency in equity-based compensation models across the tech sector.

Microsoft announced a second major round of job cuts this year, potentially impacting up to 9,000 roles across departments, geographies, and levels. This move aims to streamline operations and reduce costs amidst increasing AI infrastructure expenses and broader industry trends of workforce adjustments. These cuts represent less than 4% of Microsoft’s global workforce.

Duluth Trading Company (DLTH) announced a workforce reduction of 51 positions (3% of its workforce) on June 4, 2025, to streamline operations. The move aims to optimize the business model, sharpen brand messaging, and improve the customer experience. The company, known for durable workwear and humorous marketing, caters to a hands-on lifestyle through online, catalog, and retail channels. Anticipated costs are less than $1 million.