May 3, 2026
When we hear about layoffs by large corporations, our first instinct is often to blame artificial intelligence (AI) — especially when it comes to Big Tech companies.
In Q1 2026, 86 tech companies laid off over 80,000 employees. That's quite the jump from Q1 2025, when 103 tech companies laid off around 30,000 workers. It's also the highest number of layoffs in three years. (1)
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The idea that AI is to blame for these job losses didn't come from nowhere; CEOs are actively citing AI as the cause. In March, AI was claimed to be the leading reason for layoffs in the U.S., making up 25% of all job cuts. In 2026, it's supposedly the reason behind 13% of all layoffs so far. (2)
But this may not be entirely accurate. A different motivation could be behind job cuts, and perhaps AI is just the scapegoat.
Big Tech is engaging in massive layoffs — and blaming AI
On Thursday, April 23, Meta announced in an internal meeting that it planned to lay off 10% of its staff in May. Three sources on the call told Business Insider that the company said it was open to cutting even more jobs in the future. (3)
The same day, Microsoft sent workers an internal memo that offered voluntary buyouts. Around seven percent of its employees are eligible for the program.
Other tech companies that have cut jobs in 2026 include Eventbrite, Oracle, Quora, and Spotify, to name a few. (1)
A lot of companies. A lot of layoffs. And many of these organizations are blaming job cuts on AI.
"Almost every company that does layoffs is blaming AI, whether or not it really is about AI," Sam Altman, CEO of OpenAI, said at BlackRock's US Infrastructure Summit in March (4). Using AI as an excuse for laying off workers has been referred to as "AI washing." (5)
Some CEOs are at least somewhat honest.
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"Since it's a thing now, I should note that the layoffs aren't related to AI," Tim Sweeney, CEO of Epic Games, said in a March note to his employees that announced the company would cut more than 1,000 jobs. (6)
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The true culprits behind tech layoffs
In a March interview with 20VC, businessman and venture capitalist Marc Andreessen said that, while many layoffs are blamed on AI, there are two other main causes. The first is that the federal funds rate was cut to 0% due to the COVID-19 pandemic, then the Fed quickly hiked the rate until it was over 5% in 2023. (7)
So, all large companies' costs increased significantly, and they had to restructure their finances.
The second huge factor? Overhiring during the pandemic.
"The hiring binge that companies went on in COVID was wild, right?" Andreessen said. "And it was the combination of the two. It was the interest rates going to zero during COVID, and then it was just the complete loss of discipline at all these companies when they went virtual."
Andreessen thinks a lot of large companies are overstaffed due to this period of overhiring — by 25% to 75%.
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"Now they all have the silverbullet excuse," he said. "'Ah, it's AI!'"
What to do if you get stuck in the Big Tech-AI crossfire
If you've been let go, the reason doesn't make much of a difference. You're still out of a job. Thankfully, you can set yourself up for financial success by taking several steps early in your unemployment.
If you were laid off, not fired, you probably received a severance package. Before the funds hit your bank account, review the terms so you know how much money to expect. Then, make a plan for how you will use the cash.
Do you have an emergency savings fund? This is exactly the time to tap into it. Between an emergency fund and a severance package, you may be financially secure enough that you don't have to panic about finding your next job immediately. This gives you more time to breathe, buff up your resume, and job hunt.
You should, however, immediately file for unemployment.
"Most states don't backdate benefits, so your eligibility clock starts the day you file," Caroline Vernon, Vice President of Coaching Development and Engagement at INTOO, told Reader's Digest. "Regardless if you feel you will land back on your feet quickly, you make too much money or you don't need it, you should still file for unemployment. It's insurance you have paid for." (8)
Along with providing money, your local unemployment office should also provide resources for job hunting, writing a cover letter, and interviewing for positions.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Layoffs.fyi (1); Challenger, Gray & Christmas (2); Business Insider (3); YouTube (4),(7); Fortune (5); Epic Games (6); Reader's Digest (8)
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Laura Grace Tarpley is a contributing reporter for Moneywise who has been covering personal finance and working in digital media for 10 years. Her expertise spans banking, investing, retirement, loans, mortgages, and taxes.
