AI-driven restructuring reshapes workforce as layoffs mount across tech industry

According to Layoffs.fyi, about 120,000 technology jobs have been cut globally so far in 2026.

Artificial intelligence (AI) is increasingly emerging as a key driver of workforce restructuring across the technology industry, with several major companies citing automation, efficiency gains and AI investments while announcing thousands of job cuts this year, TechCrunch reported.The trend accelerated this week after Microsoft announced it would eliminate about 4,800 jobs, or 2.1 per cent of its global workforce.

While the company said the affected roles were “not being replaced by AI”, it acknowledged that AI is changing how work is performed by automating routine tasks and reshaping organisational structures.According to Layoffs.fyi, about 120,000 technology jobs have been cut globally so far in 2026.

Outplacement firm Challenger, Gray & Christmas also found that AI was the most frequently cited reason for technology layoffs in May, the highest monthly total in years.The restructuring has extended across much of the technology sector.

Oracle disclosed that it had reduced its workforce by about 21,000 employees over the past year, stating in a regulatory filing that wider adoption of AI technologies across its operations had contributed to the cuts.

GitLab also eliminated around 350 jobs, redirecting resources toward AI infrastructure to support rapidly growing AI workloads, while Intuit announced plans to cut roughly 3,000 positions as part of a restructuring focused on simplifying operations and increasing investment in AI.Meta laid off around 8,000 employees while simultaneously shifting nearly 7,000 workers into AI-focused roles as it reorganised around artificial intelligence.

Cisco also reduced nearly 4,000 positions, saying the restructuring was intended to realign investments toward AI, networking, silicon and cybersecurity.

Cloudflare, despite reporting record quarterly revenue, cut about 20 per cent of its workforce as it overhauled its organisational structure in response to AI-driven productivity changes.AI reshapes workforce beyond Big TechThe shift is extending beyond traditional software companies.

General Motors reduced up to 600 information technology roles, with a person familiar with the matter telling CNBC that AI was among the factors behind the decision.

Coinbase eliminated about 700 jobs after Chief Executive Brian Armstrong said AI had dramatically accelerated software development and was changing how teams operate.

PayPal also unveiled plans to reduce its workforce by around one-fifth over the next two to three years as it expands AI adoption across software engineering, customer service and risk management.Several other technology companies have adopted similar strategies.

Snap cut around 1,000 jobs, with Chief Executive Evan Spiegel saying AI was enabling teams to automate repetitive work and improve productivity.

Atlassian eliminated about 1,600 positions, saying AI would change the mix of skills required across the company.

Dell Technologies reduced its workforce by roughly 11,000 employees as it expanded investments in AI-optimised servers, while Block cut about 4,000 jobs, with founder Jack Dorsey arguing that AI tools and leaner teams were fundamentally changing how companies are built and managed.Salesforce also reduced headcount after reporting efficiency gains from its Agentforce AI platform, while Amazon laid off about 16,000 corporate employees after Chief Executive Andy Jassy said generative AI and AI agents would eventually reduce the need for some corporate roles.

IBM, meanwhile, continued workforce reductions across several businesses while expanding hiring for AI and hybrid cloud positions.

Bloomberg previously reported that the company plans to significantly increase entry-level AI recruitment even as it automates parts of its human resources function.According to TechCrunch, the layoffs have come even as many of these companies continue to post strong financial results, prompting debate over whether AI is the primary driver of the workforce reductions or whether companies are also correcting for aggressive hiring during the pandemic.

Nevertheless, the industry’s focus has clearly shifted toward deploying capital into AI infrastructure and capabilities, even as organisations streamline their existing workforce.