Tech layoffs are nothing new in Silicon Valley, a region long shaped by boom-and-bust hiring cycles, speculative investment and shifting economic conditions. But in recent months, executives have offered a different explanation for job cuts: the rapid rise of A.I. So far in 2025, nearly 400 tech companies have announced layoffs, affecting close to 94,000 employees, according to TrueUp’s tech layoff tracker. Many of these roles are expected to be replaced—directly or indirectly—by A.I.-driven efficiencies.
Salesforce, for example, cut 1,000 roles earlier this year, redirecting hiring toward sales roles focused on A.I.-powered products. CEO Marc Benioff said last month that A.I. currently handles 30 to 50 percent of the company’s work, reducing the need for roles in fields like software engineering and customer support. Despite the job cuts, Salesforce remains financially strong, reporting $9.8 billion in revenue for the February-April quarter, an 8 percent year-over-year increase.
Microsoft, the world’s second largest company by market capitalization, has also made significant cuts in 2025. The company laid off around 9,000 employees in July, following a separate round of more than 6,000 in May. Software engineers have borne the brunt of these reductions.
Though Microsoft has not explicitly linked the layoffs to A.I., the technology’s growing role inside the company is undeniable. In April, CEO Satya Nadella disclosed that A.I. now writes about 30 percent of Microsoft’s code—a figure he expects to climb.
Microsoft isn’t alone in its internal shift toward A.I. At Google, well over 30 percent of new code includes A.I. generated suggestions, CEO Sundar Pichai revealed earlier this year. At Meta, Mark Zuckerberg has described developing an A.I. agent with coding abilities comparable to a mid-level engineer as one of the company’s top goals for 2025.
Startups across Silicon Valley are following suit, increasingly requiring A.I. fluency in hiring and day-to-day operations. In a March memo to staff, Shopify CEO Tobias Lütke wrote that A.I. use is now “a fundamental expectation,” adding that any team requesting additional headcount or resources must first prove that the task can’t be handled by A.I.
Duolingo CEO Luis von Ahn echoed a similar stance the following month. He told employees that headcount increases would only be approved if teams demonstrate the need for human involvement over automation. A.I. proficiency, he added, will also play a bigger role in hiring and performance reviews. On top of that, Duolingo will stop using contractors for tasks that A.I. can complete.
With 2025 only halfway through, A.I.-driven workforce changes are poised to continue. In a June memo, Amazon CEO Andy Jassy laid out the company’s sweeping integration of A.I. across areas like shopping, AWS, and internal operations. “It’s hard to know exactly where this nets out over time,” he wrote, “but in the next few years, we expect this will reduce our corporate workforce as we gain efficiency from using A.I. extensively across the company.”