AI Powered Job Losses Mounting Quickly

Pivot 5
May 28, 2025

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Firms Choosing AI Over Hiring Amidst Market Uncertainty

Venture capitalist Jeffrey Bussgang said the “Magnificent 7” may have hit peak employment, allowing revenue growth without more people. Stanford economist Nicholas Bloom added that tariff turmoil and weak business sentiment are making firms choose AI automation over hiring.
AI now writes or assists 30% or more of the code at both Microsoft and Alphabet. Executives at Intuit, Expedia, Coca-Cola and Palantir told investors their generative tools speed coding, boost marketing efficiency and slash production time.
Microsoft cut roughly 6,000 roles recently in product management and software engineering, even as it gears up for an AI-powered software surge. The company hasn’t frozen hiring, but the move spotlights how generative AI is already squeezing coding jobs.

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VC data firm SignalFire reports that Big Tech cut hiring of new graduates by 25% in 2024, while startups fell 11% from the prior year. Researchers say generative AI is a significant driver of the pullback.
A World Economic Forum survey finds 40% of employers plan staff cuts where AI can automate work. Big Tech simultaneously raised hiring of professionals with two to five years’ experience by 27%, with startups up 14%.
AI now handles routine coding, debugging, financial research, and software installation that once filled entry-level desks. The automation squeezes fresh graduates, intensifying a hiring paradox where experience is required but unobtainable.

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Telstra told investors it will aggressively deploy AI across customer service, software development, and network operations. CEO Vicki Brady said the push means the company’s workforce will be smaller by 2030.
CFO Michael Ackland said the telco spends over $2bn a year on customer-facing operations and believes AI can drastically reduce that bill. Telstra already uses generative AI to summarise customer calls and is testing autonomous agents to work alongside staff.
The “Connected Future 30” strategy ties heavy AI adoption to strict cost-discipline targets over the next five years. It also aims to place Telstra in the top 25% of global enterprises for both AI maturity and employee engagement by 2030.

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IBM eliminated about 8,000 roles, largely in its HR division, as part of a workforce rebalancing. Yet the company now employs more than 270,000 people after reinvesting in software engineering, sales, and marketing tied to its AI push.
Its AskHR platform handled 94% of routine HR requests last year—11.5 million interactions—saving an estimated $3.5 billion across 70 job functions. IBM is also hiring aggressively in India to capitalize on lower costs and deep technical talent.
The simultaneous cuts and hiring illustrate how AI is phasing out routine positions while elevating roles that require creativity and strategic thinking. IBM’s restructuring shows productivity gains from automation can immediately translate into targeted headcount shifts rather than blanket reductions.

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CrowdStrike will cut 5% of its global workforce, eliminating about 500 jobs. CEO George Kurtz told staff the reductions stem from “AI efficiencies” that flatten hiring and speed product development.
The company expects up to $53m in restructuring charges tied to the cuts. Despite posting fourth-quarter revenue of $1bn, up 25% year over year, CrowdStrike lost $92m in the period.
The layoffs arrive less than a year after a faulty CrowdStrike software update crippled 8.5m Windows systems worldwide, prompting critics to label the move “tone deaf”. Analysts from Gartner and academia say firms increasingly cite AI savings to justify workforce reductions even as promised productivity gains remain elusive.

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