Tech Sector Faces Potential Loss of 235,000 Jobs Due to AI
The tech industry is bracing for significant job losses as artificial intelligence (AI) continues to advance. Amazon and Microsoft are among the companies potentially affected, with Amazon warning that AI will ‘change the way our work is done.’
Amazon, currently the world’s fourth most valuable company by market capitalization, has already shed 2,200 jobs this year. This move follows similar actions by Intel, Microsoft, Meta, and HP, all streamlining their operations amid the accelerating shift toward automation and AI.
Microsoft is also expected to cut thousands of sales roles as it increases its AI spending. The company has already reduced its workforce by 8,840 jobs this year, a decline of almost 4%. According to RationalFX, Intel is making the most significant changes, with a projected 20% workforce reduction by year’s end, following the elimination of 15,000 employees in 2024.
The research firm anticipates that the tech sector could see a total of 235,871 layoffs in 2025, based on an average of 646 workers losing their jobs daily since the start of the year.
Amazon CEO Andy Jassy recently informed staff that AI would lead to a leaner workforce. He explained that while some jobs would be eliminated, new career paths would emerge. ‘In the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,’ Jassy noted.
Roles likely to be affected include customer service and data entry positions. However, jobs requiring problem-solving, critical thinking, and creativity may benefit from AI integration. McKinsey Digital reported in January that 92% of companies plan to increase their AI investments over the next three years.
Jassy highlighted the potential of AI agents, software systems that perform tasks on behalf of users. These agents could revolutionize various industries by automating tasks, scouring the web, summarizing results, and more. ‘Many of these agents have yet to be built, but make no mistake, they’re coming, and coming fast,’ Jassy emphasized.
The economic uncertainty and high interest rates are further contributing to the decline in tech positions. The US Federal Reserve has maintained steady interest rates since the start of the year, and the World Bank projects global growth to slow to 2.3% in 2025, nearly half a percentage point lower than initially expected.
