Tech Industry Grapples with Job Cuts in 2025
Less than six months into 2025, the technology industry is once again grappling with significant workforce reductions, continuing a trend from the previous year. According to data compiled by Layoffs.fyi, an independent tracker, over 50,000 tech employees have been laid off across the sector so far this year. The month of April alone saw a staggering 24,545 tech employees affected by reductions across 26 different companies, highlighting the accelerated pace of job cuts in recent months. This compares to approximately 150,000 job cuts recorded across 549 companies throughout the entirety of 2024, indicating that 2025 is quickly approaching last year’s total figures.
Klarna’s Experience with AI Customer Service
A notable example comes from the Swedish fintech firm Klarna. The company had reportedly pursued an “AI-first” strategy involving the deployment of AI agents for customer service roles. However, according to a report by Bloomberg, Klarna has since begun recruiting human workers for customer service positions again after finding that its AI-first approach in this area led to lower-quality results compared to human agents.
CEO Emphasizes Human Availability
Sebastian Siemiatkowski, founder and CEO of Klarna, was quoted as emphasizing the importance of human availability in customer interactions, stating, “It’s so critical that you are clear to your customer that there will always be a human if you want.”
Challenges in Scaling AI Initiatives
Further data supporting the challenges in fully realizing the promised benefits of AI comes from a recent IBM survey. In this global survey of 2,000 CEOs, respondents indicated that only 25 percent of their AI initiatives have delivered the expected returns over the past few years. Furthermore, a mere 16 percent of AI projects have reportedly been successfully scaled across the entire enterprise, suggesting that widespread, impactful AI implementation remains a significant hurdle for many organizations.
Major Tech Firms Announce May Cuts
May 2025 has seen several prominent technology companies announce specific job cuts, adding to the year’s growing total.
Microsoft’s Significant Reduction
Microsoft initiated a significant round of layoffs on Tuesday, May 13, affecting approximately three percent of its global workforce. This reduction translates to at least 6,000 employees across various parts of the tech giant’s business empire, including certain international offices of LinkedIn, which is owned by Microsoft. Notably, Gabriela de Queiroz, an AI director at the company, was reportedly among those affected by these job cuts. A Microsoft spokesperson was quoted by The Verge as stating, “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” indicating the cuts are part of ongoing strategic adjustments.
Amazon’s Devices and Services Unit Affected
Amazon also announced job reductions on Wednesday, May 14, cutting about 100 roles within its devices and services unit. This group is responsible for the development of a diverse range of products, including Kindle e-readers, Echo speakers, the Alexa voice assistant, and the company’s Zoox self-driving car initiative. A company spokesperson was quoted by Reuters, explaining the decision: “As part of our ongoing work to make our teams and programs operate more efficiently and to better align with our product roadmap, we’ve made the difficult decision to eliminate a small number of roles.”
Google’s Global Business Unit Cuts
Google also contributed to the layoff figures in May, cutting approximately 200 jobs on Tuesday, May 6. These reductions occurred across its global business unit, which oversees sales and partnerships, according to a report from The Information. Reuters quoted the company as stating that these changes were part of a small number of adjustments across teams “to drive greater collaboration and expand our ability to quickly and effectively serve our customers.”
Chegg’s Restructuring Amid AI Competition
The edtech sector also saw significant cuts, with Chegg announcing on Monday, May 13, that it would lay off about 22 percent of its workforce. This amounts to 248 employees who will be asked to leave the company as it seeks to reduce costs and streamline operations. Chegg’s decision comes at a time when students are increasingly turning to AI-powered tools like ChatGPT as alternatives to traditional online education platforms. As part of the restructuring announced on Monday, Chegg also stated that it plans to shut down its U.S. and Canada offices by the end of the year, according to a report by Reuters.
CrowdStrike Streamlines Operations
In the cybersecurity space, CrowdStrike announced on Wednesday, May 7, that it is planning to cut about 500 roles, representing roughly five percent of its workforce. These cuts are part of the company’s efforts to streamline operations and reduce costs. As of January of this year, the Texas-based company reportedly had around 10,118 full-time employees. CrowdStrike CEO George Kurtz was quoted by Reuters stating, “While we will continue to prudently hire, primarily in customer-facing and product engineering roles, we are reducing roles in some areas of the business,” indicating a strategic reallocation of resources.
Strategic Recalibration in the Industry
The surge in tech layoffs in 2025, with May contributing significantly to the total, underscores a period of strategic recalibration within the industry. While AI is frequently cited as both a driver of efficiency and a significant cost center necessitating cuts elsewhere, the challenges in fully replacing human roles with AI and achieving expected returns on AI investments suggest a more complex picture than simple automation might imply. As the year progresses, the interplay between rapid AI advancement and workforce dynamics is likely to remain a central theme in the tech sector.
