While artificial intelligence is frequently mentioned in tech industry layoff notices, a new report finds that broader economic factors and corporate restructuring contribute heavily to job cuts and declining tech job postings.
If you read the typical 2025 mass layoff notice from a tech industry CEO, you might think artificial intelligence (AI) is the main reason workers are losing their jobs. The reality, however, is more complex, with companies signaling a drive for efficiency and preparing for broader changes brought by AI.
Tech job postings are down 36 percent from 2020, according to a new report from Indeed. But AI is not the sole factor in the slowdown; the end of the pandemic-era hiring boom also played a role. “We’re kind of in this period where the tech job market is weak, but other areas of the job market have also cooled at a similar pace,” said Brendon Bernard, an economist at the Indeed Hiring Lab. He added, “Tech job postings have actually evolved pretty similarly to the rest of the economy, including relative to job postings where there really isn’t that much exposure to AI.”
Despite this nuance, recent layoff emails from tech CEOs often reference AI. Workday CEO Carl Eschenbach, for example, cited “increasing demand” for AI as a reason for layoffs. India’s Tata Consultancy similarly linked its 12,000 job cuts to preparations for deploying “AI at scale.”
Experts say that rather than AI directly replacing workers, the need for greater AI investment is a bigger driver. Tech companies are justifying large spending on data centers, chips, and energy to power their AI systems. Bryan Hayes, a strategist at Zacks Investment Research, described a “double-edged sword” of restructuring in the AI age: “Will AI replace some of these jobs? Absolutely. But it’s also going to create a lot of jobs.” Hayes noted that tech layoffs have improved profit margins, but the effect on employment prospects remains uncertain.
Employees who can leverage AI to innovate and create new products and services will be in high demand, Hayes said. He pointed to Meta, which is offering lucrative packages to recruit top AI scientists from competitors like OpenAI.
Indeed’s report shows that AI specialists are faring better than software engineers, but job postings for both have declined—reflecting cyclical sector trends. Bernard noted, “The plunge in tech hiring started before the new AI age, but the shifting experience requirements is something that happened a bit more recently.”
Entry-level jobs are most affected by AI, especially in marketing, administrative assistance, and HR, where tasks overlap with generative AI tools. Job postings for workers with at least five years of experience have fared better. Some roles, such as health workers drawing blood, nursing assistants, hazardous materials removers, painters, and embalmers, appear more immune to AI-related changes.
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