AI and the Layoff Wave: Is the Workforce Entering an Era of Permanent Disruption? More than 61,220 employees in the tech sector have already lost their jobs in 2025, spread across 130 companies

The wave of layoffs is once again shaking the confidence of employees around the globe. Several senior employees took to social media to share their grief and frustration. One of the viral posts came from Gabriela de Queiroz, Director of AI for Startups at Microsoft. She wrote on LinkedIn, "These days, no matter how hard you work, how much you advocate for your company, or how much results and visibility you bring—whether it's helping Microsoft become a trusted name among AI startups or driving initiatives to make it a better place to work for hundreds of people—none of that makes you immune to restructuring."

In another moving post, the wife of a long-serving Microsoft employee shared, "My husband has worked for Microsoft for 25 years. He was just laid off—randomly selected by a computer algorithm. His last day is this Friday—his 48th birthday."

The companies leading this wave, including Microsoft, IBM, Google, and Amazon, cited these decisions are driven by structural overhauls, cost rationalisation, and a sharper focus on profitability.

Microsoft has cut nearly 3 per cent of its global workforce around 6,000 employees across all levels and geographies. A spokesperson said, "We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace."

Similarly, Amazon stated in January that it would eliminate certain roles to address "unnecessary layers" in the company's structure. Cybersecurity software provider CrowdStrike also announced a 5 per cent workforce reduction just last week. The list extends further to Intel, PwC, and many others.

According to the layoff tracking site Layoffs.fyi, more than 61,220 employees in the tech sector have already lost their jobs in 2025, spread across 130 companies.

AI in the Picture

While economic headwinds play a part, there is another major driver—AI. The technology that was once expected to augment human effort is now automating tasks at an unprecedented pace.

In a conversation with Meta CEO Mark Zuckerberg, Microsoft CEO Satya Nadella revealed, "I'd say maybe 20 per cent, 30 per cent of the code that is inside of our repos today and some of our projects are probably all written by software."

Likewise, Google CEO Sundar Pichai said in October that over 25 per cent of new code was now generated by AI.

Shopify CEO Tobi Lutke went further, telling employees they must "prove AI cannot do a job" before justifying new hires.

At Duolingo, CEO Luis von Ahn recently confirmed that the company would increasingly rely on AI instead of human contractors.

AI's ascent is clearly disrupting traditional roles. According to the World Economic Forum's Future of Jobs Report 2025, around 40 per cent of employers expect to reduce headcount in areas where AI can automate tasks. While the report forecasts that technology will create 11 million new jobs, it may also displace 9 million, making the net outcome a complex balancing act.

Experts urge collaboration, not competition with AI

However, Alankar Saxena, CTO and Co-Founder at Mudrex, takes a more collaborative view, "AI has helped us automate repetitive tasks, enabling our team to focus more on innovation and strategic growth. We prioritise enhancing collaboration between humans and AI rather than replacing people. By promoting continuous upskilling and a growth mindset, we ensure employees remain valued and ready to work alongside AI. This approach boosts productivity, innovation, and job satisfaction."

Manish Jha, Chief Technology Officer at Addverb, echoed this sentiment,"We view automation as a way to enhance work, not replace it. While robots take on repetitive, physically demanding tasks, they free up people for roles requiring problem-solving, technical skills, and supervision. We invest in AI-powered learning platforms for reskilling and upskilling, and our internal programs prepare operators to work with collaborative robots, autonomous systems, and analytics tools. To ease adoption, we prioritise operator engagement and intuitive design. In FMCG warehouses, our automation solutions have tripled order fulfilment speed while improving job quality by shifting workers to higher-value tasks like system supervision and quality control."

But what does the future hold for the workforce and work culture?

Saxena advises, "My advice to professionals is to commit to lifelong learning, regularly upskill, and develop both technical and soft skills. Curiosity and adaptability are essential to thrive in today's evolving tech landscape."

Jha adds, "Technology is evolving rapidly, which requires companies to have a more agile and skill-focused workforce. In the coming years, we expect that workplaces will become more dynamic, with humans and machines driving innovation together. There should be increased focus on adaptability, continuous learning as well as cross-functional collaboration."

Will AI create more than it destroys?

Despite the current wave of layoffs, the long-term picture isn't entirely bleak. The World Economic Forum estimates that around 170 million new jobs will be created globally this decade. However, AI-driven disruption could still lead to the automation of many roles—particularly white-collar and entry-level positions.

According to Bloomberg, AI could potentially replace over 50 per cent of tasks handled by market research analysts (53 per cent) and sales representatives (67 per cent), compared to only 9 per cent and 21 per cent for their managerial counterparts.

Nevertheless Jha concludes, "We believe that while AI will automate existing jobs with increased efficiency and intelligence, it will also create new opportunities for new expertise in various fields."