20k job cuts at Meta, Microsoft raise concern of AI labor crisis

The more than 20,000 potential job cuts Meta and Microsoft revealed on Thursday, months after Amazon announced its most widespread layoffs ever, may only be the beginning.

The same companies that are collectively spending hundreds of billions of dollars a year to build out artificial intelligence infrastructure to meet soaring demand for AI services are seeking efficiencies from AI by slashing headcount. They’re also still trying to rightsize from the pandemic-fueled overhiring.

Many economists and industry experts are fearful that a labor crisis may be upon us today — not coming sometime in the future — given how quickly AI is sweeping across corporate America. As of this week, over 92,000 tech workers have been laid off so far in 2026, according to Layoffs.fyi, bringing the total to almost 900,000 since 2020

“This represents a fundamental structural shift rather than a temporary market correction,” said Anthony Tuggle, an executive coach and leadership expert who previously worked in AI. “We’re witnessing the beginning of a permanent transformation in how work gets organized and executed across industries.”

Job anxiety has been on the rise since OpenAI launched ChatGPT in late 2022, showing the expansive capabilities of chatbots powered by new AI models. Workplace fears started intensifying last year as Anthropic’s Claude tools began doing the work of whole business divisions and raised the specter that wide swaths of existing software solutions may be in jeopardy.

Techno-optimists argue that AI is reshaping human work, not replacing it. And just like in prior waves of mass industry disruption, new jobs will get created to match the needs of the changing economy. Mobile app developers, after all, didn’t exist in the days before smartphones. And what use were IT administrators before we created servers?

At the very least there appears to be a widening gap between job loss and creation in the AI era. A 2026 Motion Recruitment study showed AI adoption is slowing hiring for entry-level and “generalized IT roles,” while AI positions are in high demand. Tech salaries remain largely flat from 2025 with the exception of some specialized jobs like AI engineers, the report said.

Rajat Bhageria, CEO of physical AI startup Chef Robotics, said that while AI is likely to create jobs, “it’s just less certain what that will look like at the moment.”

“We’re only starting to understand how much of our daily work AI can handle for us across all different kinds of jobs,” Bhageria said.

Meta only hinted at AI in its announcement on Thursday. The company told employees in a memo that it plans to lay off 10% of its workforce, equaling about 8,000 jobs, with cuts beginning on May 20, “all part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making.” The company is also scrapping plans to fill 6,000 open roles,…