Key facts
- Companies like Block, Cisco, and Atlassian have cited AI as a reason for recent layoffs.
- GitLab announced it would cut 350 employees as part of an overhaul to meet the 'agentic era.'
- Cisco announced about 4,000 layoffs, citing intensifying competition in the AI era.
- A March report found AI cited in 8% of job-cut plans so far this year.
- Some companies are reportedly using AI as a rationale for layoffs that might have occurred regardless.
- A survey found 29% of hiring managers reopened positions previously eliminated after implementing AI.
A growing number of companies are citing artificial intelligence as a reason for recent layoffs, with some attributing the cuts to AI-driven efficiency improvements and the need to adapt to the 'agentic era.' Block CEO Jack Dorsey announced significant workforce reductions, stating that AI tools paired with smaller teams enable a new way of working. Cisco is laying off about 4,000 employees as it reorganizes around AI and faces intensifying competition. Atlassian is cutting 1,600 jobs as part of a restructuring to focus on AI and enterprise growth, with CEO Mike Cannon-Brookes acknowledging AI changes skill needs. Cloudflare is cutting over 1,100 roles, affecting about 20% of its workforce, to reorganize for the 'agentic AI era.' Coinbase is reducing its workforce by 14%, or about 700 workers, citing market volatility and AI's impact on productivity. Crypto.com is cutting 12% of its staff, integrating enterprise-wide AI. Angi is cutting roughly 350 jobs partly due to 'AI-driven efficiency improvements.' GitLab is cutting 350 employees as part of an overhaul to meet the 'agentic era' and reinvest savings into internal AI resources. However, concerns are raised about 'AI washing,' where companies may be using AI as a pretext for layoffs that would have occurred regardless. An MIT study indicated that 95% of corporate AI investments have yielded zero return so far. Conversely, a survey suggests that some companies may rehire roles after implementing AI, with 29% of hiring managers reopening positions previously eliminated.