1,20,000 layoffs in 6 months! Why are Microsoft, Meta, Amazon and other IT companies cutting jobs?

IT Layoffs: The global technology industry is witnessing another round of job cuts as companies continue to invest heavily in artificial intelligence (AI) while reducing costs and reshaping their workforces.

Microsoft on Monday announced it will eliminate 4,800 jobs, or about 2.1 per cent of its workforce, making it the latest technology company to announce large-scale layoffs in 2026. According to Layoffs.fyi, around 119,494 employees have been laid off across 219 technology companies so far this year.

Several companies, including Oracle, Amazon, Meta, Cisco, Salesforce, Dell and Coinbase, have linked their workforce restructuring to AI adoption, organisational simplification or investments in AI infrastructure.

Microsoft cuts 4,800 jobs, Xbox to lose 3,200 roles

Microsoft said it is immediately eliminating 4,800 jobs across the company. Of these, Xbox will account for about 3,200 positions.

The company had already announced several rounds of job cuts over the past year, including 9,000 layoffs. Earlier this year, Microsoft also offered voluntary buyouts to around 9,000 employees in the United States, representing nearly 7 per cent of its US workforce, according to media reports.

Microsoft shares have fallen 19 per cent so far in 2026 and had declined nearly 23 per cent during the first six months of the year, reflecting investor concerns over returns from generative AI investments.

The company has also spent tens of billions of dollars expanding its gaming business, including the acquisition of Activision Blizzard, but continues to trail Sony's PlayStation and Nintendo in the console market.

Oracle, Amazon and Meta announce some of the biggest layoffs

Oracle disclosed in June that it reduced its workforce by 21,000 employees over the past 12 months, equivalent to about 13 per cent of its workforce. The company said the adoption of AI technologies across its operations had resulted, and may continue to result, in workforce reductions.

Amazon announced 16,000 corporate job cuts in January after reducing another 14,000 positions in October 2025. CEO Andy Jassy had earlier said wider adoption of generative AI and AI agents would reduce the need for some existing corporate jobs over the next few years.

Meta laid off about 8,000 employees, or nearly 10 per cent of its workforce, while simultaneously shifting around 7,000 employees into AI-focused roles.

Dell's workforce declined by around 11,000 employees during fiscal 2026, falling to about 97,000 from 108,000 a year earlier. The company spent $569 million on severance while projecting that AI server revenue could double in the next fiscal year.

More technology companies restructure around AI

Several other technology companies also announced workforce reductions during 2026. Cisco said it would cut nearly 4,000 jobs, about 5 per cent of its workforce, while reallocating resources towards silicon, optics, security and AI.

Intuit announced plans to eliminate around 3,000 jobs, representing nearly 17 per cent of its workforce, as part of restructuring aimed at simplifying operations and increasing AI investments.

Cloudflare reduced about 1,100 jobs, or nearly 20 per cent of its workforce. Coinbase announced around 700 layoffs, equivalent to 14 per cent of its staff, saying AI had significantly improved productivity and enabled leaner teams.

GitLab laid off around 350 employees, about 14 per cent of its workforce, to increase investments in AI infrastructure and support rising AI-related workloads.

Atlassian announced about 1,600 layoffs, representing 10 per cent of its workforce, while Block reduced around 4,000 jobs, nearly half of its workforce.

Snap eliminated around 1,000 jobs, or 16 per cent of its workforce, citing productivity gains from AI tools.

Google, IBM and Salesforce continue workforce changes

Google has continued to reduce employees across different teams through performance reviews, voluntary buyouts and organisational restructuring. The company has not disclosed a total number of layoffs, but outside estimates place the figure between 1,500 and more than 3,000 employees in 2026.

Google has also reduced the number of managers overseeing small teams by more than one-third over the past year.

IBM has continued workforce reductions during 2026, with estimates suggesting between 3,000 and 9,000 US jobs have been eliminated. At the same time, the company plans to increase hiring for AI and hybrid cloud roles.

Salesforce laid off fewer than 1,000 employees across marketing, product management, analytics and AI-related teams. The company earlier reduced about 4,000 customer support roles, with executives saying AI has reduced the need to refill several positions.

AI spending grows as companies reduce workforce

Technology companies are expected to spend more than USD 700 billion on AI this year as they expand data centres, develop AI models and build computing infrastructure.

Many companies say AI is helping employees complete tasks faster and reducing the need for larger teams. Several have also shifted hiring towards AI engineers, cloud computing specialists and infrastructure experts while reducing management and support roles.

The layoff wave is spreading beyond the IT sector

The wave of job cuts is no longer limited to technology companies. General Motors reduced between 500 and 600 information technology (IT) jobs, saying AI was one of the factors behind the restructuring.

Meanwhile, Volkswagen Group is considering a major restructuring plan that could eliminate up to 100,000 jobs worldwide, or about 15 per cent of its global workforce, according to media reports. The proposal also includes the possible closure of four factories in Germany as the company deals with weak sales in China and high operating costs in Europe.