Tech sector undergoing mass redundancies as companies intensify search for leading AI specialists: Has the tech employment sector spiraled out of control?
The tech industry has been witnessing a significant shift in its labour dynamics, with a simultaneous surge in AI talent hiring and mass layoffs, particularly in entry-level and routine roles.
In the first seven months of 2025, over 100,000 tech jobs have been cut globally, with more than 80,000 being lost in the US alone. Companies like Microsoft, IBM, and Meta have been at the forefront of this trend, with AI automation replacing tasks in HR, coding, software testing, and support roles.
For instance, IBM eliminated 8,000 HR jobs as their AI AskHR bot started handling millions of queries annually. Similarly, Microsoft attributes a 30% AI code generation rate as part of its workforce reduction rationale.
Concurrently, the demand for AI talent has doubled in early 2025 compared to the previous year. Companies are heavily investing in AI-specialized roles to innovate and future-proof their businesses. This AI-centric hiring contrasts the contraction of traditional roles, indicating a deliberate reorientation of talent models to focus on AI expertise and automation capabilities.
While some view this shift as an ideological push favouring AI over employees, the evidence suggests a pragmatic response to technological advancement and economic pressures. However, this shift raises concerns about workforce sustainability and entry-level opportunities.
In India, the need for 1 million AI professionals by 2026 is far from being met. Fresh graduates with the right AI credentials are commanding 3-4x the usual entry-level salaries. On the other hand, repetitive coding, IT support, QA, and customer service jobs are being gutted due to generative AI. TCS, an Indian IT giant, has laid off 12,000 employees, marking its largest-ever cull.
The question of why this split-screen drama makes sense continues to be asked. The current tech labour market is acting like a zero-sum game where the winner takes all. AI is still flawed and needs human supervision, guardrails, context, and ethics. Yet, companies are investing in AI while simultaneously offloading tens of thousands of employees without adequate upskilling or career transition programs.
The headlines will continue to show engineers losing their jobs one day and reading about their peers being poached for millions the next. In the US, AI-focused roles are offering up to 43% more than their non-AI counterparts. The tech industry's AI-driven transformation is reshaping the value of labour, with a deeper ideological shift away from team growth and towards hiring the winner.
[1] Microsoft to Cut 10,000 Jobs Amid Tech Layoffs Wave
[2] AI Talent Shortage: The Real Reason Behind Tech Layoffs
[3] IBM's Layoffs: The AI Factor
[4] The Human Cost of AI: Tech Layoffs and the Future of Work
[5] Demand for AI Talent Doubles in 2025
- As a result of the tech industry's shift towards AI automation, Microsoft plans to cut 10,000 jobs, with AI code generation contributing to the workforce reduction, embracing technology and AI expertise as a priority over traditional roles.
- Despite the ongoing wave of tech layoffs, there is an increasing demand for AI talent, with companies heavily investing in AI-specialized roles to innovate, future-proof their businesses, and stay competitive in the fast-evolving tech landscape.
