LinkedIn co-founder Reid Hoffman has urged caution about the growing list of tech layoffs being blamed on artificial intelligence, arguing the AI label is increasingly being used to disguise more conventional drivers of job cuts, including the hiring excesses of the pandemic era. In a post on X, Hoffman wrote: “Just a reminder that we’re likely to see more layoffs announced ‘because’ of AI –– it makes companies seem strong and moving forward. It’s important not to ignore other factors, including hiring trends 2020-2023, that might be present.”The post lands during one of the busiest stretches of tech layoffs in recent memory. Coinbase said this week it would cut 700 employees, or 14% of its workforce, citing both crypto market conditions and a push to reorganise around “AI-native pods.” Meta is laying off about 8,000 people on May 20, with another round expected later this year. Snap eliminated 1,000 jobs in April after pressure from activist investor Irenic Capital. Block, parent of Square and Cash App, is cutting 40% of its workforce. Layoffs.fyi has tracked more than 92,000 tech job cuts in 2026 so far.
The pandemic hiring boom tech still hasn’t fully unwound
Hoffman’s pointed reference to 2020-2023 cuts to the heart of the issue. Big Tech expanded aggressively during the pandemic, often hiring faster than business needs warranted. Washington Post analysis of company filings shows Amazon, Google and Meta collectively employ roughly the same number of people today as they did at the 2022 peak, despite multiple rounds of cuts in between.Marc Andreessen, a venture capitalist and Meta board director, made a similar argument on a recent podcast. Layoffs at large companies usually reflect overstaffing or shifting economic conditions, he said, but AI now offers a tidy cover story. “Now they all have the silver bullet excuse: ‘Ah, it’s AI,'” Andreessen said.OpenAI CEO Sam Altman has gone further, coining the term “AI washing” for the trend. Speaking at a conference in March, Altman said: “Almost every company that does layoffs is blaming AI, whether or not it really is about AI.”
Why the AI line plays so well on Wall Street
The financial incentive to frame cuts as AI-driven is hard to ignore. Block’s share price popped after Jack Dorsey announced the 40% reduction in February. GoPro stock has climbed roughly 73% since it announced a 23% workforce cut in April. Aleksandar Tomic, associate dean at Boston College, told Fortune that the AI framing lets executives spin layoffs as forward-looking efficiency moves rather than signs of trouble.Coinbase CEO Brian Armstrong put it in similar terms this week, telling staff the company was being “rebuilt as an intelligence, with humans around the edge aligning it.” Yet his memo also acknowledged crypto market weakness as a trigger for the cuts.
The productivity story doesn’t quite hold up
The data complicates the AI narrative. A Gartner survey of 350 global firms with annual revenues above $1 billion found that around 80% of companies deploying AI had reduced headcount, yet workforce reduction rates were nearly identical between firms reporting strong AI returns and those seeing weak or negative outcomes. “Workforce reductions may create budget room, but they do not create return,” said Helen Poitevin, distinguished VP analyst at Gartner.Capital spending pressure offers another layer of context. Alphabet, Meta, Amazon and Microsoft are collectively projected to spend over $700 billion on capex this year, more than double their outlay two years ago. Meta CEO Mark Zuckerberg told employees on April 30 the company’s cuts were directly tied to capital spending choices, not AI tools replacing workers. Goldman Sachs economist Joseph Briggs told Axios that AI layoff claims are most credible at large tech firms with high automation exposure, but added that productivity gains have historically lifted wages over time, not suppressed them.
