Mass Layoffs Continue as Tech Companies Zero In on AI and Automation

Mass Layoffs Continue As Tech Companies Zero In On Ai And Automation
  • Mark Zuckerberg announced that Meta is reducing its workforce by 5% to focus on automation, aiming to “move out low-performers” as soon as possible »
  • Despite this, reports reveal that specialized AI skills are the most in-demand tech skills »
  • For employees who stay, this raises the stakes: Will upskilling secure their place in the world of AI? »

Meta CEO Mark Zuckerberg recently shared plans to replace 5% of the company’s workforce with automation, equating to about 3,600 jobs.

Shortly after the January 14 announcement, Zuckerberg sent out a memo to Meta employees warning of the upcoming change: “Meta is working on building some of the most important technologies in the world — AI, glasses as the next computing platform, and the future of social media. This is going to be an intense year, and I want to make sure we have the best people on our teams.”

This follows similar moves by other major tech conglomerates, including Amazon, which plans to cut 14,000 managerial positions by Q1 2025, and Intel, which is laying off 15,000 employees to focus on AI chip development.

IBM is also replacing 8,000 jobs with AI, and Cisco has cut 10,000 roles to focus on investing in AI startups.

It’s a trend we’re likely to keep seeing: According to the World Economic Forum’s 2025 Future of Jobs Report, 41% of companies plan to reduce their workforce by 2030 due to AI.

Despite these layoffs, specialized tech jobs (such as big data specialists, AI and machine learning experts, and software developers) remain the most in demand in the market.

We’re in the era of AI

Generative AI is, unsurprisingly, the most sought-after skill that is taking the tech industry by a storm, according to Upwork’s Most In-Demand Skills for 2025 report.

Teng Liu, an economist at The Upwork Research Institute, says that the genAI skillset is expected to see continued growth throughout 2025.

“Professionals can adapt by focusing on high-value, niche skills like generative AI modeling and knowledge representation, which are commanding premium rates,” Liu told us.

Liu is referring to the Upwork report, which shows that freelancers in generative AI are earning up to 22% more per hour than those in traditional AI and machine learning roles like data extraction.

Since the release of ChatGPT in November 2022, investments in AI have surged nearly eightfold, creating a 220% year-over-year rise in demand for generative AI modeling. Because of this, agentic AI, in particular, will “permeate the workplace,” says Udacity, an eLearning platform that has upskilled 21 million people.

Bar graph titled "Technology trends driving business transformation, 2025-2030"
AI and information processing technologies are the driving force for business transformation. (Source: World Economic Forum, Future of Jobs Survey 2024)

Sarah Maris, Senior Manager of Technical Learning Content at Udacity, may have some advice for those who may be one of the thousands laid off this year.

“My heart goes out to anyone who has been laid off. I have advice for those looking for technical work,” said Maris. “Tech skills that bridge AI and industry expertise will be the most in-demand as organizations prioritize innovation through application rather than pure technological breakthroughs.”

The Future of Jobs Report also shows that 70% of surveyed companies are interested in skills that highlight innovation, including analytical thinking, resilience, adaptability, leadership, social influence, creative thinking, and self-awareness.

While some require technical expertise, many of these sought-after skills instead center around conceptual thinking and problem-solving — a vastly different priority than we’ve traditionally seen in the space.

To upskill, or not to upskill?

Nearly 40% of current skills will become outdated by 2030. The same percentage of companies also plan to cut staff due to obsolete skills.

“Acquiring new skills requires time and financial investment, so professionals should prioritize where they apply their skills and choose projects that offer the best opportunities for growth and earning potential,” said Liu.

Of course, Meta isn’t the first to replace lower-skilled roles with automation. It’s a trend as old as time: Just take a look at how we went from horse-drawn carriages to self-driving cars. It only took 100 years.

If we’re repeating history, will today’s displaced workers also have to pivot to different roles or industries? Maybe, but maybe not. Upwork’s report estimates that 85% of employers are planning to prioritize upskilling their workforce.

Asian developer leads present code review session, pointing at code projected on the wall with colleagues  teamwork and knowledge sharing in software development
85% of employers plan to prioritize upskilling their workforce, according to Upwork.

Maris says tech workers should also take the initiative to be more hirable in this age of AI.

“This doesn’t just apply to people looking for work,” Maris said. “Everyone at all levels of an organization must stay agile by embracing skills-first learning and adopting tools like agentic AI to enhance their productivity and build tailored solutions for their specific business needs. This helps them become more valuable employees, now and in the future.”

But what happens to the employees who are lucky enough to remain?

The aftermath of mass layoffs hits harder than just the fear of job insecurity: 70% of “layoff survivors” reported a decrease in motivation at work, and 66% felt overworked due to increased responsibilities.

With this in mind, it does leave companies with an important choice: They either upskill and support their workers or play a part in risking a future where only the adaptable survive.

Of course, even the most adaptable aren’t necessarily safe.

If automation is already edging out low-skill workers, what’s stopping it from targeting mid- to high-level roles as AI grows smarter? Are we inadvertently preparing our workforce to train the very systems that could one day replace them?

It’s something former President Joe Biden touched on in his January 15 farewell speech:

“Artificial intelligence is the most consequential technology of our time — perhaps of all time. Nothing offers more profound possibilities and risks for our economy and our security, our society, our very — for humanity. Artificial intelligence even has the potential to help us answer my call to end cancer as we know it. But unless safeguards are in place, AI could spawn new threats to our rights, our way of life, to our privacy, how we work, and how we protect our nation.”

The real question now is this: Can we get it right before we face a reality we only thought could exist in a sci-fi movie?