165,925 layoffs in the U.S. technology industry from January to September… 54% increase compared to the previous year
More than 120,000 layoffs due to AI reasons… ‘AI Washing’ Debate Until Cost Reduction
Large U.S. technology companies are investing large amounts of money into artificial intelligence (AI) while reducing manpower in existing organizations. As of September this year, the number of layoffs in the U.S. technology industry exceeded 160,000.
Following big tech companies such as Microsoft (MS) and Meta, media companies such as Disney and NBCUniversal have recently begun to reorganize their workforce. As AI is rapidly entering the workplace, the so-called ‘AI washing’ debate, which explains even cost reductions and existing restructurings as AI conversions, is growing.
According to Challenger, a U.S. employment information company, the number of announced layoffs in the U.S. technology industry from January to September this year was 165,925, a 54% increase from the same period last year.
This is in contrast to the 39% decrease in layoffs across all U.S. companies during the same period. The technology industry accounted for 29% of all job reduction announcements, the largest by industry.
Big tech increases investment in AI and reduces existing organizations
As AI investment competition intensifies, the allocation of funds and personnel within companies is also changing. They are increasing investments in data centers, AI semiconductors, and cloud infrastructure, while reducing costs in existing businesses and organizations.
Microsoft cut 4,800 people, or about 2.1% of its total workforce, last July. The commercial sector and Xbox business were included in the target, but the company distinguished this from direct job replacement by AI.
The company explains that as AI automates repetitive tasks, the way people work and the jobs required are changing. Microsoft has reassigned more than 4,000 people to new, high-priority jobs over the past year. In addition to reducing the workforce, work was also carried out to transfer existing employees to areas where they were needed.
Meta also reduced its workforce by about 10% last May. Some organizations have also considered using AI to run teams with fewer personnel than before.
However, workforce reduction did not immediately lead to increased productivity. A plan to significantly reduce the number of people on some teams was discussed, but as problems with AI reliability, security, and productivity emerged, the plan for additional job cuts was withdrawn.
Apart from organizational reorganization, AI investment is expanding. Meta is expected to invest more than $130 billion in AI infrastructure and semiconductors this year. Although it cannot be said that all the costs secured by reducing the existing organization will go to AI investment, it is clear that the center of gravity of funds and manpower is shifting toward AI.
“Is it really because of AI?”... Growing ‘AI washing’ controversy
There has also been an increase in cases where AI is cited as a direct reason in job reduction announcements. According to Challenger, the number of job cuts announced due to AI across all U.S. industries from January to September this year was 120,136, accounting for about 21% of the total.
However, this does not mean that AI has actually replaced 120,000 jobs. This figure is a sum of cases where companies presented AI as a reason for layoffs.
During this process, the expression ‘AI washing’ also appeared. This means that restructuring due to cost reduction, poor performance, or reorganization of existing businesses is packaged as productivity improvement or organizational efficiency through the introduction of AI.
According to market research firm Gartner, less than 1% of job cuts in 2025 are directly linked to productivity improvements through AI. Gartner's analysis is that there are cases in which the productivity effects of AI are exaggerated rather than the actual productivity effects of AI during the job reduction process.
Paul Osterman, professor emeritus at MIT Sloan School of Management, also pointed out this phenomenon through Fortune, an American economic magazine. “AI is the perfect excuse to justify large-scale layoffs,” he said, adding that it has become easier for companies to explain layoffs as the result of technological changes rather than management decisions.
It is clear that AI is changing the way we work and the workforce we need. However, it is difficult to regard the ‘AI-related job cuts’ announced by companies and the actual jobs replaced by AI as the same number.
Even Disney is lined up for layoffs... The media industry is also reorganizing its organization.
Workforce reorganization is continuing in the media industry as well. On the 29th of last month, Walt Disney laid off hundreds of people, mainly in human resources and technology. This is an additional reduction following the reduction of about 1,000 jobs in April.
We are also pursuing organizational reorganization of the TV business. ABC Entertainment, 20th Century Television, Hulu Originals, and Freeform may be affected, and the possibility of hundreds of additional job cuts is also discussed. The goal is to reorganize the existing TV brand-centered organization to focus on streaming customers.
NBCUniversal also began reducing staff in its global streaming technology organization on the 1st.
However, it is difficult to tie the layoffs of these media companies to human resource replacement based on AI. Disney's direct background is the reduction of its existing TV business and the restructuring of its business to focus on streaming.
The situation is similar in the technology industry. Although AI is replacing some tasks, cost reduction, business reorganization, and investment priorities are being adjusted simultaneously. Although layoffs due to AI have increased rapidly, it is still difficult to confirm how many jobs would have actually been maintained without AI.
Rather, what has become clear is that the standards by which companies deploy people and capital are changing. As choices continue to increase investment in AI and reduce existing organizations, AI is becoming a technology that creates new jobs and at the same time a standard for reconsidering the need for existing human resources and organizations.
