AI-Driven Restructuring Accelerates Layoffs Across U.S. Technology Sector
Companies in the U.S. cite artificial intelligence, efficiency gains and cost cutting as workforce reductions intensify.
Governor Gavin Newsom speaks at Google San Francisco office about 'Creating an AI-Ready Workforce' that new joint effort with some of the world’s leading tech companies to help better prepare California’s students and workers for the next generation of technology, in San Francisco, California, United States on August 7, 2025. Photo by Anadolu Images.
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rtificial intelligence is rapidly reshaping the U.S. technology industry, with major companies accelerating workforce reductions as they restructure operations, automate tasks and redirect investment toward AI-driven growth.
Technology firms are increasingly citing artificial intelligence as a primary reason for layoffs, reflecting a broader shift in corporate strategy aimed at boosting productivity, lowering costs and streamlining operations.
Data from outplacement firm Challenger, Gray & Christmas show AI has become the leading justification for announced job cuts in the United States.
Nearly 40% of layoffs announced in May were attributed to artificial intelligence, a sharp increase from 7% in January, 10% in February, 25% in March and 26% in April.
The technology sector has been at the center of the trend.
Layoffs announced by technology companies during the first five months of 2026 rose 66% from the same period a year earlier, reaching 123,653 positions, making it the industry with the highest number of job cuts this year.
Economists caution that artificial intelligence is not the only factor behind the reductions. They say many companies are also responding to overhiring during the COVID-19 pandemic, persistent cost pressures and broader restructuring efforts aimed at improving profitability.
Major technology firms restructure around AI
Software giant Oracle reported one of the largest workforce reductions, revealing that its global full-time employee count declined by 21,000 over the past year.
A filing with the U.S. Securities and Exchange Commission (SEC) showed Oracle employed 141,000 full-time workers as of May 31, down from 162,000 a year earlier.
The company said the adoption and deployment of artificial intelligence technologies across its operations had resulted in workforce reductions and could continue to do so.
Software development platform GitLab also announced significant restructuring as it shifts its business model toward AI-powered services.
The company said it will reduce its workforce by about 14%, eliminating roughly 350 jobs while simplifying management structures and withdrawing operations from 22 countries as it expands infrastructure for AI-related workloads.
Meta is pursuing a different strategy, combining layoffs with workforce redeployment.
According to U.S. media reports, the social media company plans to cut around 8,000 jobs while transferring approximately 7,000 employees into new AI-focused positions.
Chief Executive Mark Zuckerberg reportedly told employees that the restructuring was necessary as competition in artificial intelligence intensifies, warning that success in the sector is not guaranteed.
Meta has already implemented multiple rounds of layoffs this year, including a 10% reduction in staff at its Reality Labs division in January, followed by additional cuts affecting hundreds of employees in March.
Broader industry transformation
Several other major technology companies have also announced workforce reductions linked to AI investments and organizational restructuring.
Financial software company Intuit said it will eliminate 17% of its full-time workforce to improve operational efficiency and focus more resources on strategic priorities, including artificial intelligence.
Networking equipment maker Cisco plans to cut approximately 4,000 jobs as it redirects investment toward AI and other growth businesses.
Cloudflare announced the elimination of more than 1,100 positions as it redesigns its organizational structure and internal processes for the AI era.
Cryptocurrency exchange Coinbase said it would reduce its workforce by around 14%, citing market conditions and its ongoing AI transformation.
Financial technology company PayPal has announced plans to reduce its workforce by 20% over the next three years while integrating artificial intelligence throughout its operations.
Social media platform Snap also joined the growing list of companies restructuring around AI, announcing plans to lay off about 1,000 employees—roughly 16% of its workforce—and eliminate more than 300 vacant positions.
Chief Executive Evan Spiegel said rapid advances in artificial intelligence were reducing repetitive tasks and accelerating business processes, making organizational changes necessary.
Other companies undertaking AI-related restructuring this year include Angi, Atlassian, Block, Crypto.com and Wix.
The wave of layoffs highlights how artificial intelligence is reshaping employment across the technology industry, with companies increasingly seeking to automate routine work while investing heavily in AI infrastructure and specialized talent.
While businesses argue the changes are necessary to remain competitive in a rapidly evolving market, the trend has also intensified concerns about the long-term impact of artificial intelligence on employment, particularly in administrative, software development and support functions.
(Source: Anadolu Agency)
