The wave of AI layoffs is becoming powder

Something strange is happening in technology right now. Companies are posting record profits and revenue while laying off tens of thousands of people, citing AI as the official explanation. So far this year, there have been an estimated 363 job cuts at tech companies this year, affecting nearly 150,000 people — a pace of about 974 people per day, 44% faster than last year — according to TrueUp, a tech job board and recruiting platform that also operates one of the most cited trackers in tech.

The trend seems to be growing rapidly. Tech layoffs hit their highest month in two years, with nearly 40,000 cuts, and AI was the most cited reason for layoffs across the industry for the third month running, according to outsourcing firm Challenger, Gray & Christmas.

There is growing skepticism that AI is actually the cause, though – that it’s a simple cover story rather than a real cause. Few examples illustrate the reversal better than what happened in the Payments Block earlier this year. After being criticized for laying off nearly half of the company earlier this year, Jack Dorsey denied that the cuts were a sign of trouble, saying instead that AI tools are “enabling a new way of working that fundamentally changes what it means to build and run a company.” But pressed by comments on X about the bloat he had caused during the violence, Dorsey later admitted that Block was overworked.

Other voices have also begun to be heard, including legendary VC Marc Andreessen, who recently called AI a “silver bullet excuse” for pandemic-era bankruptcy layoffs. In an interview with podcaster investor Harry Stebbings, Andreessen said, “Basically, every big company is overstaffed. It’s at least 25% staffed. I think most big companies are 50% staffed. I think most of them are 75% staffed. Now they all have a silver bullet excuse: Ah, AI.”

What happened earlier this month at Uber captures this topic well. The company has cut about 23% of its people division — HR and recruiting — affecting less than 1% of its 34,000 employees, it said. A spokesperson for the company pointed out that the cuts have nothing to do with AI. But the announcement came about a month after Uber’s CTO offered that the company had burned through its entire 2026 AI coding budget in four months and had to hold back the money individual developers spend on tools like Cursor and Claude Code, so whatever Uber says publicly, people want to connect those dots.

What makes this hot: at a time when tens of thousands of workers are being shown the door, a small group of AI insiders are getting rich on a scale that’s hard to fathom.

Early last month, AI chipmaker Cerebras Systems closed its first day on the Nasdaq up 68% from its IPO price of $185, giving the chipmaker a market capitalization of about $67 billion — the largest US IPO since Snowflake’s 2020 debut. Eventually, co-founders Andrew Feldman and Sean Lie were billionaires. (The company’s shares have since fallen by 30%.)

SpaceX went public on Friday and enjoys, as of this writing, a market capitalization of $2.1 billion, turning Musk into a paper billionaire and potentially making around 4,400 billion, and 400 cents in the process – assuming the shares don’t go down.

Anthropic and OpenAI are quickly entering the public market, too, both with valuations of $1 trillion or more.

Then there’s Mark Zuckerberg. In early March, he bought a $170 million mansion in Miami’s “Billionaire Bunker,” setting the all-time record for the most expensive home sale in Miami-Dade County history. Two months later, Meta announced that it would lay off 8,000 people, or about 10% of its workforce.

It’s not just Zuckerberg; tech titans often shell out huge sums of money for their real estate portfolios. But these extremes come at a time when many Americans are more stressed than they have been in years.

Consider that workers with employer-sponsored health insurance face premium increases of about 6% to 7% this year, more than double the rate of inflation, private health insurance costs have nearly doubled since 2008, and median home prices have risen 28% since the start of 2020, while mortgage rates have nearly doubled.

In a January 2026 New York Times/Siena poll, 65% of voters said a middle-class lifestyle is out of reach, and a recent poll found that 76% of Americans now name the cost of living as their top economic concern, up from 58% a year ago.

This is not just a story about job losses through segregation, in short. Tens of thousands of tech workers have been laid off to replace unjustifiable costs at the same time that tens of thousands of AI insiders are seeing a once-in-a-generation wealth of paperwork – and being told that AI is why they’re out of a job. Whether that’s the real explanation or not (most economists point to inflation, war in the Middle East, and broader economic uncertainty as the real drivers of corporate caution), perception is what it is. One group is mysteriously getting rich with developments that are said to replace the other.

It’s not hard to find an example of what happens when that divide gets wide enough. In 2008, the financial crisis that began with rampant lending and excessive risk-taking on Wall Street ended with bailouts of the banks it created, while millions of Americans lost their jobs and homes in the Great Recession that followed. Three years later, that anger was expressed in Occupy Wall Street.

That move may seem unusual in comparison if the current trajectory holds. Occupy Wall Street arose out of crisis and public anger was, at its core, about who paid for the cleanup. This time, there is no crash to point to. Companies are profitable, AI itself is creating a new class of fortune overnight, and layoffs are happening anyway, with AI being identified as the driver. If the idea in 2008 was, “We bail out the people who broke the economy while you lose your job,” the idea here might end up being, “We’re richer than ever with the technology we’re using to put you back in your place.”

Many companies — Block, Atlassian, Cloudflare, among them — watched their stocks rise when they pointed to AI as the reason for the cuts, so the strategy makes sense on its face. Still, they might want to consider whether that’s really the message they want to send to the people they’re creating, and everyone watching right now.