If Big Tech is Laying Off Workers, Why Isn't it Getting Smaller?

You may have heard that over the past few years, some of the world’s largest tech giants have laid off tens of thousands of employees. Meta alone has eliminated almost 40,000 positions through multiple rounds of cuts. Other big names like Google, Amazon, and Microsoft have all announced major layoffs of their own. However, despite cuts, these companies still employ almost the same number of people as they did before the layoffs. 

So what’s the point?

Originally, companies argued that layoffs would reduce costs and make space for larger investments in artificial intelligence. But cutting experienced workers created new problems. Veteran employees take years of knowledge with them when they leave, making it much harder for companies to maintain products and train new employees. In many cases, businesses have been forced to reverse course (go back to old ways). For example, Ford rehired hundreds of experienced engineers after they realized that AI could not meet the expected standards.

Layoffs have also made it much harder to retain talent. Employees who do survive job cuts search for more stable opportunities, and experienced engineers become more and more expensive to replace. Instead of shrinking their workforce, top tech companies have shifted employees between firms and are paying higher salaries to attract the best talent.

Artificial intelligence is undeniably changing the technology industry, but it still hasn’t eliminated the need for skilled workers. Several studies have shown that companies are already rehiring for positions they previously thought AI could replace. 

The recent waves of tech layoffs show that reducing headcount is not as easy as it may seem. While AI will continue reshaping how people work, companies are discovering that replacing experience is not the same as replacing a job title. Behind every large AI breakthrough are skilled workers who design, improve, and guide technology, making expertise more valuable than ever.