Amazon, Microsoft and more cite AI for 2025 layoffs

Layoffs have been a defining feature of the job market in 2025, with several major companies announcing thousands of job cuts driven by artificial intelligence.

In fact, AI was responsible for almost 55,000 layoffs in the U.S. this year, according to consulting firm Challenger, Gray & Christmas.

There were in total 1.17 million job cuts through 2025, the highest level since the Covid-19 pandemic in 2020 when there were 2.2 million layoffs announced by the end of the year.

In October, U.S. employers announced 153,000 job cuts, and there were over 71,000 job cuts in November, with AI being cited for over 6,000 for the month, per Challenger.

At a time when inflation bites, tariffs are adding to expenses, and firms are looking to carry out cost-cutting measures, AI has presented an attractive, short-term solution to the problem.

The Massachusetts Institute of Technology released a study in November showing that AI can already do the job of 11.7% of the U.S. labor market and save as much as $1.2 trillion in wages across finance, healthcare, and other professional services.

Not everyone is convinced that AI is the real reason behind the dramatic job cuts, as Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, previously told CNBC, that it might be an excuse.

Stephany said many companies that performed well during the pandemic “significantly overhired” and the recent layoffs might just be a “market clearance.”

“It’s to some extent firing people that for whom there had not been a sustainable long term perspective and instead of saying ‘we miscalculated this two, three years ago, they can now come to the scapegoating, and that is saying ‘it’s because of AI though,'” he added.

Here are the top firms that cited AI as part of their layoff and restructuring strategy in 2025.

In October, Amazon announced the largest ever round of layoffs in its history, slashing 14,000 corporate roles, as it looks to invest in its “biggest bets” which includes AI.

“This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before… we’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business,” Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in a blog post.

Amazon CEO Andy Jassy warned of the cuts earlier this year, telling employees that AI will shrink the company’s workforce and that the tech giant will need “fewer people doing some of the jobs that are being done today, and more…