The wave of AI layoffs has become a powder keg

There’s something strange happening in the world of technology right now. Companies are posting record profits and revenues while laying off tens of thousands of people, citing artificial intelligence as the official explanation. So far this year, there have been estimates 363 layoffs at tech companies this year, affecting nearly 150,000 people — a rate of about 974 per day, 44% faster than last year — according to TrueUp, a tech jobs board and hiring platform that also runs one of the most widely cited tech layoff trackers.

Layoffs have hit the tech industry Highest single month in two years Last month, with nearly 40,000 cuts, artificial intelligence was the most cited reason for layoffs in every industry for the third month in a row, according to Challenger, Gray & Christmas.

There is growing suspicion that AI is really the culprit, though it’s more of a convenient cover story than the actual cause. Few examples illustrate the decline better than what happened in the Block earlier this year. After almost being hit by a layoff Half the mass Earlier this year, citing AI as the reason, Jack Dorsey denied that the cuts were a sign of trouble at the payments company, insisting that AI tools “enable a new way of working that fundamentally changes what it means to build and run a company.” He also admitted, when pressed by X commenters about the bloat he created during the pandemic, that Block had, in fact, overhired.

Other voices have also begun to weigh in, including famed VC Marc Andreessen, who recently called AI “Silver bullet excuse“For layoffs that are really about overhiring in the pandemic era conversation “Basically, every big company is overstaffed. They’re at least 25% overstaffed. I think most big companies are 50% overstaffed. I think a lot of them are 75% overstaffed. Now they all have the magic excuse: Oh, it’s AI,” Andreessen said with podcast investor Harry Stebbings.

What happened earlier this month at Uber captures the mystery well. The company said it has cut about 23% of its people division – its human resources and recruitment unit – affecting less than 1% of its 34,000 employees. A company spokesman explained that the discounts have nothing to do with artificial intelligence. But the announcement came about a month after Uber’s CTO announced that the company had exhausted its entire 2026 AI coding budget in four months. The spending of individual engineers had to be capped On tools like Cursor and Cloud Code; Whatever Uber says publicly, it’s hard not to connect the dots.

What makes this so combustible: At the same moment that tens of thousands of workers are being sent out the door, a small group of AI insiders has become wealthy on a scale that is difficult to fathom.

Early last month, artificial intelligence chip maker Cerebras Systems It closed its first day On the Nasdaq index up 68% from its IPO price of $185, giving the chipmaker a market value of about $67 billion — the largest U.S. tech IPO since Snowflake debuted in 2020. By the close, co-founders Andrew Feldman and Sean Li Billionaires. (The company’s shares have since fallen 30%).

Meanwhile, SpaceX went public on Friday and, as of this writing, has a market cap of $2.1 trillion, turning Musk into a paper trillionaire, potentially making an estimated 4,400 millionaires, and about 400 millionaires in the process, assuming the stock holds up. Anthropy and OpenAI are Slowly quickly Towards the general market as well, with estimates at $1 trillion or more.

Against this backdrop, Mark Zuckerberg’s recent purchase takes on new meaning. In early March, he purchased A $170 million mansion at Miami’s “Billionaire Bunker” – setting the all-time record for the most expensive home sale in Miami-Dade County history. Two months later, Meta announced that she would stop working 8000 peopleOr approximately 10% of its workforce.

It’s not just Zuckerberg or other tech giants who routinely spend eye-popping sums on their real estate portfolios. But these extremes come at a time when many Americans are under more pressure than they were a year ago.

Workers with employer-sponsored health insurance face premium increases of approx 6% to 7% This year, more than double the rate of inflation, the cost of private health insurance has nearly doubled since 2008, and average home prices have risen. 28% since the beginning of 2020While mortgage rates have nearly doubled.

In a January 2026 New York Times/Siena poll, 65% of voters A middle-class lifestyle is out of reach, a May 2026 CNN/SSRS poll found, he said 76% of Americans They now cite the cost of living as their top economic concern, rising sharply from 58% the previous year.

After all, this is not just a story about job losses in isolation. Tens of thousands of laid-off tech workers are facing an unusually unforgiving cost environment at the same time that tens of thousands of AI insiders are seeing a once-in-a-generation paper fortune.

It is not difficult to find a precedent for what happens when this gap is wide enough. In 2008, the financial crisis that began with loose lending and excessive risk-taking on Wall Street ended with bank bailouts that triggered the crisis, while millions of Americans lost their jobs and homes in the Great Recession that followed. Three years later, this anger crystallized into the Occupy Wall Street movement.

That may seem strange in comparison. The Occupy Wall Street movement emerged from a crisis, with banks needing to be bailed out, and public anger, at its core, over who paid for the purge. This time, there is no incident to point to. Companies are profitable, AI itself is creating a new class of fortunes overnight, and layoffs are happening anyway, with AI cited as the reason. If the perception of 2008 was: “We bail out the people who bankrupt the economy while you lose your job,” the perspective here might end up being: “We are getting richer than ever, apart from the same technology we are using to replace you.”

As we’ve seen with Block, Atlassian, Cloudflare and others, tech companies have seen their stocks rise when they mention AI, so the strategy is understandable. However, they may want to think about whether this is really the message they want to send to the people they are laying off, and to anyone else who is watching right now.