Layoffs are here —

On a slow Sunday afternoon, at TCS, the message landed like a tornado: 12,000 jobs will be made redundant in a year.  

Weeks earlier, Microsoft’s 9,000 cuts crept in like zombies, wiping out whole teams.  

Across the technology industry, staff are now speaking of an approaching rock in the sky—a slow-moving asteroid that everyone can see yet no one can outrun. 

Regardless of the industry you are in, layoffs are coming. 

Layoffs: The startling numbers 

The current tally is mounting by the day. From January to mid-July this year, 169 tech firms have shed 80,150 workers (excluding TCS), according Layoffs.fyi, a jobs-tracking website. The figure for the whole of 2024 was 152,922; in 2023 it was 264,220. 

TCS’s two per cent trim, aimed squarely at middle and senior ranks, lands on top of 2,387 domestic tech lay-offs in the past seven months. It also goes beyond six start-ups that have shut operations entirely. 

“Ways of working are changing: we must be future-ready and agile,” CEO K. Krithivasan said, hinting that TCS is “deploying AI at scale and evaluating the skills we will require for the future.” Despite maintaining, jobs were not cut due to AI.

Why the cuts are deeper now compared to Dot.com bubble

The absolute numbers remain modest beside America’s 2000-02 bloodbath, when close to a million jobs had evaporated.

Earlier cycles were about demand collapse or speculative excess; however, from 2022 onwards, automation and AI-driven shifts have become central.

They are now targeting middle-aged, high-performing senior employees and routine jobs – displacing well over half a million team members in the last three years.

What’s driving the layoffs this season?

Experts are certain that, current layoff cycle is distinct from previous downturns.

Two forces drive the turmoil.

The first is old-fashioned economics. As the pandemic accelerated digital transformation, tech companies ramped up hiring between 2020 and 2022. With surging demand for e-commerce, cloud services, social media, and online collaboration, firms like Meta, Google, Amazon, and Microsoft nearly doubled their headcounts, expecting continued rapid growth.

However, from 2022 onwards, economies worldwide are facing stubbornly high inflation, which has driven up costs for both consumers and businesses. It is combined with global supply chain concerns following the ongoing geopolitical tensions. Efficiency and lean operations have become central executive priorities as investors demand “sustainable” rather than “hyper-growth” models.

After US consumer prices spiked to a four-decade high US Federal Reserve hiked its policy rate from near-zero to 5.25-5.50 %. That leap has filtered straight into corporate finance: a KPMG survey of nearly 300 firms finds the average cost of debt is up 60 basis points and the average weighted-average cost of capital up 40 bp in the past year alone.  With hurdle rates rising, cash once earmarked for head-count is being redeployed to software.

The second force is business-driven – novel and more frightening. Artificial intelligence tools have matured just enough to threaten the very engineers who built them. Microsoft says roughly 30% of the code is now AI-generated.

HR paperwork, customer e-mails, call centre executive —jobs once scattered among a dozen mid-career staff—can be spat out by a large language model in less time than it takes to microwave lunch.

Earlier downturns claimed sales folk and interns first. Today, the axe falls on well-paid middle managers and routine coders. Consultancy Bain calculates that the median ‘AI displacement risk’ in American software firms is three times higher for $200,000-a-year staff than for warehouse workers on $40,000.

Low on empathy, CEOs have accepted layoff norm

The bloodbath has been easily accepted by Silicon Valley, with every leader claiming they are deeply affected by their decision, but in the same breath hinting there’s no end to this.

‘Tough decisions’ are usually made by keeping empathy aside. One of the most important skills a leader should possess, according to Daniel Goleman’s Emotional Intelligence module taught at business schools. 

However, that empathy is pushed aside to give space to bold and tough leadership. It’s evident from all statements issued by top CEOs post-layoffs. The latest being Microsoft chairman Satya Nadella, who called the elimination of 15,000 jobs (in 2025) ‘enigma of success’, without promising there won’t be a next wave. 

With artificial intelligence at the core of operations, ‘agility and innovation’ is the new mission and ‘security and quality are non-negotiable,’ he added.

Mark Zuckerberg referred to Meta’s layoff period as a “year of efficiency.” After laying off 3,600 employees in 2024, he remarked job cuts were intended to make the company leaner and more effective.

Sundar Pichai acknowledged that Alphabet had overhired based on past growth. Company’s overall headcount shrank by nearly 10,000 employees between March 2023 and March 2024.

In 2022, when Elon Musk laid off 80% of X workforce, he claimed it was necessary for transforming Twitter to X and made it clear, he wanted a work culture that’s focused on long hours and high intensity. He expected remaining employees to be “extremely hardcore” to support his vision for the company. 

Musk then set a precedent in the tech industry for aggressive cost-cutting and restructuring.

Layoff cacophony on social media is loud and clear

A Sub-Reddit called ‘layoffs’ with 127k members is bombarded with anecdotes from across the world – but mostly the United States and the technology sector.

‘My entire family got laid off,’ posted one. 

‘Microsoft dumped us. Cognizant didn’t even pretend to care,’ claimed another.

‘Is there a disconnect between economic reports and reality?’ wondered a Redditor.

Most of them were slain by an AI model they built or by a boardroom decision taken by the men who take home millions in salary packages.

Financial Implications of Layoffs

Many argue that large layoffs are freeing up capital for enormous outlays in AI to boost both competitive advantage and operational effectiveness.

They are helping firms remain competitive during economic headwinds such as global supply chain pressures, trade volatilities and tighter consumer spending. The trend indicates a pragmatic step towards a leaner workforce that can rapidly redeploy talent towards AI growth areas. 

What next? Investment in AI focussed manpower

But, even as layoffs galore in the technology world, giants are caught in a talent tug of war. 

Meta, Google and OpenAI have spent millions to lure top AI talent, offering compensation packages that exceed $100 million a year.

Silicon Valley is witnessing an unprecedented chaos, according to The Wall Street Journal, unseen talent raids, secret deals and betrayals have exploded, pegging AI researchers as valuable as NBA players and Hollywood stars. Tech CEOs are offering pay packages worth over $300 million to their most prized recruits. 

The dichotomy is stark! The signs are clear—like a juggernaut, artificial intelligence is trampling jobs while rewarding the right skill sets.

Consultancy McKinsey estimates generative AI could add $4 trillion to global GDP each year by 2030. The risk is just as big: that tens of millions are stranded between obsolete roles and the jobs of the future.

If previous slowdowns trimmed corporate fat, today’s algorithms are carve organisational muscle. The firms that survive will be those that can shed routine work while retraining people for what machines still cannot do: judge, empathise and invent. The people who survive will be those who continually invest in self-development, stay agile and keep upgrading their skills.