One thing unusual is occurring in tech proper now. Corporations are posting document earnings and income whereas shedding tens of 1000’s of individuals, citing AI because the official clarification. To this point this yr, there have been an estimated 363 layoffs at tech corporations this yr, affecting almost 150,000 individuals — a tempo of about 974 individuals per day, 44% quicker than final yr — based on TrueUp, a tech job board and recruiting platform that additionally runs one of the extensively cited tech layoff trackers.
The development seems to be accelerating. Tech layoffs hit their highest single month in two years final month, with almost 40,000 cuts, and AI was the most-cited purpose for layoffs throughout each trade for the third month operating, based on outplacement agency Challenger, Grey & Christmas.
There’s rising skepticism that AI is de facto the offender, although — that it’s extra of a handy cowl story than the precise trigger. Few examples illustrate the pushback higher than what occurred on the funds outfit Block earlier this yr. After getting hammered over shedding almost half the corporate earlier this yr, Jack Dorsey denied the cuts have been an indication of bother, insisting as a substitute that AI instruments “are enabling a brand new method of working which essentially adjustments what it means to construct and run an organization.” However pressed by commenters on X in regards to the bloat he’d created throughout the pandemic, Dorsey later acknowledged that Block had, in truth, overhired.
Different voices have additionally begun to weigh in, together with famed VC Marc Andreessen, who not too long ago known as AI the “silver bullet excuse” for layoffs which can be actually about mismanagement in some instances. In dialog with podcaster-investor Harry Stebbings, Andreessen stated, “Primarily, each giant firm is overstaffed. It’s no less than overstaffed by 25%. I feel most giant corporations are overstaffed by 50%. I feel a number of them are overstaffed by 75%. Now all of them have the silver bullet excuse: Ah, it’s AI.”
What makes this flamable is that on the very second that tens of 1000’s of staff are being proven the door, a small cohort of AI insiders is turning into rich on a scale that’s laborious to understand.
Early final month, AI chipmaker Cerebras Methods closed its first day on the Nasdaq up 68% from its $185 IPO worth, giving the chipmaker a market cap of roughly $67 billion — the biggest U.S. tech IPO since Snowflake’s 2020 debut. By the shut, co-founders Andrew Feldman and Sean Lie have been billionaires. (The corporate’s shares have since fallen 30%.)
SpaceX in the meantime went public on Friday and enjoys, as of this writing, a $2.1 trillion market cap, turning Musk right into a paper trillionaire and doubtlessly minting an estimated 4,400 millionaires and round 400 centimillionaires within the course of — assuming the shares don’t fall. Anthropic and OpenAI are rapidly inching towards the general public market, too, each at valuations of roughly $1 trillion or extra.
The consequences are displaying up nearer to residence, too. In San Francisco — now residence to dozens of AI corporations, together with the massive AI labs — high-end properties are routinely promoting for tens of millions of {dollars} over asking worth.
Then there’s Mark Zuckerberg. In early March, he bought a $170 million mansion on Miami’s “Billionaire Bunker,” setting the all-time document for the costliest residence sale in Miami-Dade County historical past. Two months later, Meta introduced it will lay off 8,000 individuals, or roughly 10% of its workforce.
Tech titans routinely shell out jaw-dropping sums on their actual property portfolios. However these extremes come at a second when many People are getting squeezed tougher than they’ve been in years.
Contemplate that staff with employer-sponsored medical insurance face premium will increase of about 6% to 7% this yr, greater than double the speed of inflation, the price of personal medical insurance has roughly doubled since 2008, and median residence costs have climbed 28% since early 2020, whereas mortgage charges have almost doubled.
In a January 2026 New York Occasions/Siena ballot, 65% of voters stated a middle-class way of life is out of attain, and a more moderen ballot discovered 76% of People now identify price of residing as their high financial concern, up sharply from 58% a yr earlier.
That is about greater than job losses in isolation, briefly. It’s tens of 1000’s of laid-off staff hitting an unusually unforgiving price atmosphere on the identical time that tens of 1000’s of AI insiders are seeing once-in-a-generation paper wealth materialize, and being advised that AI is why they’re out of a job. Whether or not or not that’s the actual clarification — many economists level as a substitute to tariffs, warfare within the Center East, and broader financial uncertainty because the precise drivers of company warning — the optics are what they’re. One group is getting unfathomably wealthy off the developments which can be supposedly changing the opposite.
It isn’t laborious to discover a precedent for what occurs when that divide will get vast sufficient. In 2008, a monetary disaster that started with unfastened lending and over-the-top risk-taking on Wall Avenue ended with bailouts for the banks that induced it, whereas tens of millions of People misplaced jobs and houses within the Nice Recession that adopted. Three years later, that anger crystallized into Occupy Wall Avenue.
That motion may look quaint compared if the present trajectory holds. Occupy Wall Avenue emerged from a disaster and the general public anger was, at its core, about who paid for the cleanup. This time, there’s no crash to level to. Corporations are worthwhile, AI itself is minting a brand new class of in a single day fortunes, and the layoffs are occurring anyway, with AI cited as the motive force. If the optics of 2008 have been, “We’re bailing out the individuals who broke the financial system whilst you lose your job,” the optics right here may find yourself being, “We’re getting richer than ever off the very tech we’re utilizing to switch you.”
Many corporations — together with Block, Atlassian, Cloudflare — have watched their shares surge once they level to AI as the explanation for cuts, so the technique is sensible on its face. Nonetheless, they could need to think about whether or not that’s actually the message they need to ship to the individuals they’re shedding, and to everybody else now watching.
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