Something strange is happening in tech 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 layoffs 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 runs one of the most widely cited tech layoff trackers.
The trend appears to be accelerating. Tech layoffs hit their highest single month in two years last month, with nearly 40,000 cuts, and AI was the most-cited reason for layoffs across every industry for the third month running, according to outplacement firm Challenger, Grey & Christmas.
There’s growing skepticism that AI is really the culprit, though — that it’s more of a convenient cover story than the actual cause. Few examples illustrate the pushback better than what happened at the payments outfit Block earlier this year. After getting hammered over laying off nearly half the company earlier this year, Jack Dorsey denied the cuts were a sign of trouble, insisting instead that AI tools “are enabling a new way of working which fundamentally changes what it means to build and run a company.” But pressed by commenters on X about the bloat he’d created during the pandemic, Dorsey later acknowledged that Block had, in fact, over-hired.
Other voices have also begun to weigh in, including famed VC Marc Andreessen, who recently called AI the “silver bullet excuse” for layoffs that are really about pandemic-era overhiring. In conversation with podcaster-investor Harry Stebbings, Andreessen said, “Essentially, every large company is overstaffed. It’s at least overstaffed by 25%. I think most large companies are overstaffed by 50%. I think a lot of them are oversta …