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A new report reveals that the rapid spread of artificial intelligence is a significant factor in a global wave of tech sector layoffs, with nearly 150,000 employees losing their jobs worldwide in the first seven months of 2025.
While companies are actively hiring AI professionals, a growing number of businesses are replacing traditional roles with automation tools and AI software, leading to a major workforce transformation.
The report, compiled by RationalFX, highlights several major companies initiating these mass layoffs. US-based chip and hardware manufacturer Intel tops the list with an expected workforce reduction of 20%, translating to a staggering 33,900 employees by the end of the year.
This move is part of a restructuring effort to focus on high-growth areas like AI and foundry services.
Software giant Microsoft has also announced significant cuts, with 19,175 layoffs as it aggressively develops and integrates AI into its operations.
India’s Tata Consultancy Services (TCS) cited “skill mismatch” as the reason for its 12,000 job cuts, reflecting a broader trend where automation is replacing entry-level positions. Notably, IBM was one of the few companies to be transparent about its strategy, confirming that AI would replace approximately 9,000 roles in its communications and marketing divisions.
The vast majority of these job losses, roughly 71%, have occurred in US-based companies. According to analyst Alan Cohen from RationalFX, while post-pandemic hiring corrections and cost-cutting are still factors, the recent layoffs signal a “broader transformation.”
He notes that companies are “replacing layers of skilled labour with automation and AI,” and that most companies will not openly admit to these AI-driven cuts. Cohen added that this shift places skilled and experienced employees at risk unless they acquire new training to match the evolving demands of the market.
The Tech Industry’s Workforce Crisis
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