AI Wave Triggers Tech Layoffs, 100,000 Jobs Are at Risk

By Douglas A. McIntyre Published Jul 2, 10:49AM EDT

Key Points

Major tech companies including Microsoft (NASDAQ: MSFT), Meta (NASDAQ: META), and Intel (NASDAQ: INTC) have collectively laid off tens of thousands of employees, increasingly citing AI automation as a driver.
AI is replacing lower-level coding roles, enabling significant cost reductions and driving improved margins, particularly for firms with large software development teams.
This trend is likely to accelerate as AI capabilities advance, positioning labor efficiency gains as a key profitability lever for mega-cap tech stocks.

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AI Wave Triggers Tech Layoffs, 100,000 Jobs Are at Risk — © 24/7 Wall St

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Transcript:

[00:00:04] Doug McIntyre: Lee, one of the things that’s happened just in the last few months is I’m starting to see real layoffs real among the mega tech guys.

[00:00:13] Doug McIntyre: I think Microsoft has announced two and then the, Wall Street Journal said they sort of did a stealth one too. Yep. And they, people are beginning to admit, the chairman of IBM (NYSE: IBM | IBM Price Prediction) said this three weeks ago, that AI is now affecting their ability to do coding, particularly what I would describe as lower level coding.

[00:00:33] Doug McIntyre: Yep. And who does more coding than a big tech company? I not sure. Nobody. A railroad company or somebody. Yeah. So I’m looking for lots of layoffs at these companies with AI replacements and to me that’s a margin play as an investor. Well, yeah. I mean, that are replaceable. That’s a margin play to me.

[00:00:55] Lee Jackson: Well, I have your numbers here.

[00:00:57] Lee Jackson: Microsoft, which has been doing extremely good, that laid off 6,500 people. That’s a fair amount of people. I know they have a, a ton of employees, but Meta Platforms, the stock that has exploded higher over the last two years, they laid off 5% of their workforce, and that’s 3,600 people. And of course, I know your favorite company that, is a, loss leader in the intel chip business.

[00:01:23] Lee Jackson: Intel laid off 21,000 people. And, surveys are indicating, and th this is that there will be over a hundred thousand layoffs just in the tech sector, when it’s all added up. Just over the last year or

[00:01:41] Doug McIntyre: so, listen, the worst run tech company in the universe, IBM, has done some layoffs. They say because of ai Yeah.

[00:01:49] Doug McIntyre: And they said there are more coming sell. Yep. When guys who literally, Can’t find the front door with a, their hands in a flashlight at IBM even. They’re smart enough to start. I know, So the

[00:02:03] Lee Jackson: thing is, I, this is only gonna increase. And like you said,it’s expensive to get rid of people, but only on a one time basis, and once they’re out the door and once they’re severance or whatever’s been paid, then you know, you’re home free.

[00:02:18] Doug McIntyre: I see this as a big margin play on big tech companies. Yeah. I really do. Being able to replace people, I don’t know where else it’s gonna work, but it’s working in tech

[00:02:28] Lee Jackson: Well and exponentially it’s gonna go higher. ’cause AI’s gonna get grow more.

[00:02:33] Doug McIntyre: Yeah.

[00:02:34] Lee Jackson: So if you’re, an entry-level tech guy, consider a job in welding Yes.

[00:02:38] Lee Jackson: To say goodbye. Yeah.I wouldn’t wanna be some engineer coming out now hoping for a, $200,000 a year job at. Big tech. I don’t know if it’s gonna be there forever.

[00:02:49] Doug McIntyre: Ain’t gonna happen.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.