AI is driving massive workforce cuts Amazon has announced that it will lay off over 30,000 employees, Microsoft and Meta more than 15,000

Advances in the field of artificial intelligence are quite astonishing by the standards the general public is used to, but according to many technology experts, if you analyze in detail the outputs and actual functionalities of individual software, they are not as disruptive as they are often presented by the managers of the leading companies in the sector. It has long been said within the field that using AI tools to solve very simple tasks, as most users do, is equivalent to using a Lamborghini to deliver a pizza.

In the debate regarding the real solidity of the artificial intelligence sector, the risk of the formation of a bubble is frequently discussed, which sooner or later could burst. According to some analysts, the need for many companies to establish themselves in the AI field is sometimes used to justify necessary internal reorganizations and staff reductions, especially in organizations that have expanded too quickly in recent years – such as several Big Tech companies.

Do companies announce investments in AI and then reduce employees?

Some large technology companies have recently scaled back their hiring plans or initiated staff cuts, despite announcing substantial investments in ambitious artificial intelligence projects. In February, for example, Amazon announced that it will allocate around 200 billion dollars to the development of infrastructure and technologies related to AI – at the same time, however, it stated that it will lay off over 30,000 employees.

Microsoft and Meta have also said they will carry out significant staff cuts, which could end up involving more than 15,000 workers overall. For both companies, this represents the most significant layoff campaign in recent years. The reason is linked to the enormous costs – amounting to several billion dollars – required for the development of artificial intelligence systems and the construction of new data centers.

Indeed, it is well known that data centers require high expenses, both during construction and throughout operational management. However, investments on the order of billions of dollars do not always seem to justify their actual usefulness, especially in a highly competitive environment with an increasing number of players.

What do the staff cuts at Microsoft and Meta consist of

Microsoft – in addition to having invested substantial resources in OpenAI – has in recent years greatly increased spending dedicated to the development of proprietary software entirely based on AI, also to catch up in the sector. In order to optimize fixed costs, such as personnel costs, the company has therefore decided to offer a severance package to more than 8,000 employees who have worked the longest in its offices in the United States – Microsoft has around 125,000 employees in the country.

In the case of Meta, however, Zuckerberg has not concealed the need to reduce the company’s workforce due to the high costs required to develop and maintain artificial intelligence systems. For this reason, after having frozen new hiring, the company now plans to lay off around 8,000 workers.