Quick Read
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Google is offering “voluntary exit packages” as Microsoft, Oracle, and Meta shrink too, pushing big tech layoffs and buyouts past 100,000 this year.
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Whether AI efficiency or costly data center spending drives the cuts, the pace shows little sign of slowing and could accelerate.
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If tech is the canary, layoffs spreading to retail and finance could push 1.6 million job losses and lift US unemployment toward recession levels.
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Microsoft (NASDAQ: MSFT) recently offered buyouts to 60,000 employees. It is unclear what the company will do if fewer than 60,000 employees take it. Earlier this year, Meta’s (NASDAQ: META) CEO Mark Zuckerberg planned to cut 45,000 people, which would have been 60% of the company’s workers. He walked it back. Oracle recently cut 21,000 people, which was about 13% of its staff. Some observers think these cuts are due to the efficiency AI has brought to the software industry. Others think it is because many megatechs have reported cash-flow-negative earnings from building AI data centers.
Regardless of the reason, Google has started layoffs according to a report from Reuters. They are called “voluntary exit packages.” It remains unclear whether they will stay voluntary. One thing is certain: across the biggest tech companies, layoffs and buyouts have topped 100,000 this year. There is little reason to believe, with AI’s growing prowess and the need for capital, that the process has ended or will anytime soon. If AI is as powerful as experts say it will be in a few months, the stream of layoffs could turn into a mighty river.
Again and again, the question is how bad the job slaughter will be because of AI. Tech is an early indication. If the process moves to retail companies, layoffs will jump into the hundreds of thousands. If the financial services industry adopts AI significantly, that is six figures of layoffs, too.
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What happens if Alphabet (NASDAQ:GOOG), Microsoft, and Oracle (NASDAQ: ORCL) are the canaries in a coal mine? If so, the US jobless rate could pick up quickly. The US workforce is 163 million people, according to the BLS. If 1.6 million people lose their jobs, the US jobless rate rises 1%. Layoffs could be much higher than 1.6 million. Unemployment moves toward recession levels. The AI jobs tsunami will have begun.