By The Chronicle Staff

Artificial intelligence is transforming the technology industry in more ways than one. While companies continue investing billions of dollars into AI development, many are also reducing their workforces, with a growing number of employers openly citing AI as a factor in their layoff decisions.

According to a recent roundup by TechCrunch, U.S. technology companies have announced nearly 140,000 job cuts in 2026, with dozens of companies pointing to AI-driven efficiencies, restructuring, or shifting priorities as reasons for reducing staff.

The list includes both well-known technology giants and smaller software companies. Firms such as Meta, Oracle, Microsoft, Amazon, Block, GitLab, Salesforce, Wix, Cloudflare, Atlassian, HP, Coinbase, and Monday.com have all announced layoffs this year while simultaneously increasing investments in artificial intelligence or expanding AI-focused initiatives.

In many cases, companies are emphasizing that AI is allowing employees to accomplish more with smaller teams. Rather than simply cutting costs, executives have described the layoffs as a way to redirect resources toward AI infrastructure, software development and new products built around generative AI.

For example, project management software company Monday.com recently announced job cuts while explaining that AI has changed how work is performed internally. Other companies have made similar statements, saying automation is reducing the need for certain roles while increasing demand for employees with AI-related skills.

The trend reflects a broader shift throughout the technology sector. Industry analysts say many companies hired aggressively during the pandemic when demand for digital services surged. As growth has normalized, businesses have sought to streamline operations while pouring unprecedented amounts of money into artificial intelligence.

That investment is enormous. According to industry estimates, major technology companies are expected to spend hundreds of billions of dollars this year building AI infrastructure, including data centers, specialized computer chips, and cloud computing capacity.

Not everyone believes AI is solely responsible for the job reductions, however.

Staffing firm Adecco Group recently argued that some companies may be overstating AI’s role, noting that layoffs are often driven by broader restructuring efforts, slower economic growth or corrections after years of rapid hiring. While AI is undoubtedly changing how work gets done, Adecco said it is more likely to reshape jobs than eliminate them entirely.

Researchers have also expressed concern about the long-term impact on entry-level workers. As AI takes over routine tasks traditionally assigned to junior employees, some experts worry companies may unintentionally reduce opportunities for younger workers to gain the experience needed to advance into senior positions.

Despite the layoffs, hiring has not stopped altogether. Many of the same companies reducing staff are actively recruiting engineers, researchers and specialists with expertise in artificial intelligence, machine learning and data infrastructure. The result is a workforce shift rather than a complete hiring freeze, with demand increasingly concentrated around AI-related roles.

For workers both inside and outside the technology industry, the message is becoming increasingly clear: AI is unlikely to replace every job, but it is rapidly changing the skills employers value. As businesses continue adopting AI tools, adaptability and continuous learning are expected to become essential for employees hoping to remain competitive in the evolving workplace. ■