Amazon, Microsoft and others are targeting AI for layoffs in 2025

Layoffs are set to define the job market in 2025, with several major companies announcing thousands of job cuts due to artificial intelligence.

In fact, according to consulting firm Challenger, Gray & Christmas, about 55,000 jobs were cut in the U.S. this year due to AI.

A total of 1.17 million job cuts will be made by 2025, the highest level since the coronavirus pandemic in 2020, when 2.2 million job cuts were announced by the end of the year.

U.S. employers announced 153,000 layoffs in October, more than 71,000 in November, and AI was listed among more than 6,000 jobs that month, according to Challenger.

At a time when inflation is rising, tariffs are increasing expenses, and businesses are looking to implement cost-cutting measures, AI presents an attractive short-term solution to this problem.

In November, the Massachusetts Institute of Technology released research showing that AI could already fill 11.7% of jobs in the U.S. labor market and save $1.2 trillion in wages across finance, health care, and other professional services.

Not everyone is convinced that AI is the real reason behind the dramatic layoffs, as Fabian Stefani, an assistant professor of AI at the Oxford Internet Institute, previously told CNBC that AI could be an excuse.

Stefani said many of the companies that have performed well during the pandemic are now “significantly overemployed” and recent layoffs may simply be “market consolidation.”

“In a way, this is firing people who didn’t have a sustainable long-term vision, and it’s like saying, ‘A couple of years ago we miscalculated, and now they can be the scapegoat, and it’s because of AI.'”

Here are the top companies that listed AI as part of their 2025 layoff and restructuring strategies.

In October, Amazon announced its biggest layoff in its history, eliminating 14,000 positions as it looks to invest in its “biggest bets” including AI.

“This generation of AI is the most transformative technology since the Internet, enabling companies to innovate much faster than ever before…We believe that to act as quickly as possible for our customers and our businesses, we need fewer layers, more ownership, and more efficient organization,” Beth Galetti, Amazon’s senior vice president of people experience and technology, said in a blog post.

Amazon CEO Andy Jassy warned of layoffs earlier this year, telling employees that AI would shrink the company’s workforce and that the tech giant would have “fewer people doing some of the jobs we do today and more people doing other types of work.”

microsoft is cutting a total of around 15,000 jobs by 2025, with the latest announcement in July slated for 9,000 roles.

In a memo to employees, CEO Satya Nadella wrote that the company needs to “reimagine” its “new-age mission,” and went on to emphasize the importance of AI to the company.

“What does empowerment look like in the age of AI? It’s not just about building tools for specific roles or tasks. It’s about building tools that allow everyone to create their own tools. That’s the shift we’re driving. From software factories to intelligence engines that empower all individuals and organizations to build what they need to achieve,” Nadella said.

global technology giant IBM CEO Arvind Krishna told the Wall Street Journal in May that AI chatbots have taken the jobs of hundreds of human resources professionals.

But unlike other companies that cited AI for job cuts, Krishna acknowledged that the company has increased hiring in other areas that require more critical thinking, such as software engineering, sales and marketing.

In November, the company announced 1% layoffs worldwide, which could affect around 3,000 employees.

In May, cybersecurity software maker CrowdStrike announced it would lay off 5% of its workforce, or 500 people, and blamed AI directly for the layoffs.

“AI has always been the foundation of our business operations,” co-founder and CEO George Kurtz said in a memo included in the securities filing. “AI flattens the adoption curve and helps you innovate from idea to product faster. It streamlines go-to-market, improves customer outcomes, and increases efficiency in both the front and back offices. AI is a force multiplier across the business.”

In February, HR platform Workday was one of the first companies to announce it would cut 8.5% of its workforce, or about 1,750 people, as it ramped up its investment in AI.

Workday CEO Karl Eschenbach said the layoffs were necessary to prioritize investments in AI and free up resources.