- By Supratik Das
- Mon, 28 Jul 2025 11:30 AM (IST)
- Source:JND
Tech Layoffs 2025: In 2025, another round of layoffs is shaking the global tech industry, with big companies such as Tata Consultancy Services (TCS), Microsoft, Intel, Meta, and Panasonic cutting some of their largest jobs. Though artificial intelligence (AI) is frequently cited as a main factor behind job automation, experts in the field and analysts reveal that the situation is more nuanced. Beyond AI, the layoffs are being driven by a mix of skill mismatches, organizational restructuring, cost-cutting mandates, global demand fluctuations, and pressure to maintain profit margins amid rapidly evolving client expectations.
TCS layoffs: ‘Skill Mismatch, Not AI’
India’s largest IT services exporter, Tata Consultancy Services (TCS), has confirmed plans to lay off around 2 per cent of its global workforce, affecting approximately 12,000 employees over the course of FY26. TCS CEO K. Krithivasan explained in an interview with Moneycontrol that the lay-offs are not so much because of AI deployment but are more due to an inability to redeploy people because of changing project requirements. “This is not because of AI giving some 20 per cent productivity gains,” Krithivasan told Moneycontrol. “This is driven by where there is a skill mismatch, or where we think that we have not been able to deploy someone,” he added. He said the firings would impact mid-level and senior professionals mainly, and would be done "in a very, very compassionate manner." TCS has promised to provide severance packages, extended insurance, and outplacement assistance.
Microsoft: 15,000+ Layoffs During AI Transformation
In a year of record-setting stock performance, Microsoft has still let go over 15,000 staff, with a sharp concentration on non-technical jobs, particularly in sales and regional support functions. CEO Satya Nadella explained the restructuring in a memo to all employees, saying, "These are some of the hardest choices we have to make. But we have to get aligned with our long-term strategic vision, focused on AI, cloud, and enterprise solutions." Nadella called this paradox an "enigma of success", which pointed to the necessity for agility even in profitability. As per in-house sources cited by The Economic Times, Microsoft is asking all of its employees to incorporate AI tools such as Copilot into their everyday work and is redefining performance reviews to capture AI usage data. The old-fashioned sales roles are being replaced with "solution engineers" who are AI product demo and technical support-trained.
Intel to Cut 24,000 Workers: Cost And Efficiency Pressures
Intel Corp is laying off almost 25 per cent of its employees, which translates to 24,000 employees, as a part of a strategic shift after supply chain woes and overestimated demand forecasts. Intel's new CEO, Lip-Bu Tan, said on the company's quarterly earnings call, "We are looking to be a leaner, more efficient company. We overestimated demand patterns, and the move to automation became a necessity. The firm is also suspending factory projects in Germany and Poland and transferring operations from Costa Rica to Vietnam, impacting another 2,000 jobs in Latin America.
Meta, Klarna, And IBM Among Few Open About AI Job Cuts
Though the majority of companies are not forthcoming, IBM and Klarna have been among the select few that openly attributed layoffs to AI implementations. IBM CEO reportedly informed The Wall Street Journal that 200 HR positions were taken over by AI chatbots, while Klarna CEO Sebastian Siemiatkowski candidly revealed in a CNBC interview that the company lost half its employees from 5,000 to 3,000 as AI systems became more prominent. "Jobs are being eliminated after AI tools are introduced, not before," noted Candice Scarborough, software consultant at CNSible Solutions. Japanese electronics major Panasonic recently announced 10,000 global layoffs, citing a strategic transition to AI-driven tech. Meanwhile, Meta’s Reality Labs division also saw downsizing this year, affecting teams developing AR/VR and fitness tech. Meta, earlier in 2025, confirmed reducing its workforce by 5 per cent, with automation being a major factor.
AI-Fueled Efficiency Or Convenient Timing?
Though firms do not usually mention AI as the official justification for laying off staff, industry analysts opine that AI-driven efficiency benefits are quietly powering staff reductions, particularly in functions of content creation, HR, customer care, and back-office functions. "Firms laying off as they adopt large-scale AI is too coincidental to ignore," said AtWork Group President Jason Leverant in a statement to CNBC. "Most companies are employing euphemisms like 'restructuring' or 'optimization' to hide the truth." Christine Inge, Harvard workforce strategist, said in an interview with CNBC, "Being direct about AI displacement provokes backlash from employees and regulators. Remaining vague helps control optics during transition."
Aside from AI, organizations are also struggling with client pressure to cut costs, insufficient contemporary digital skills, and diminishing tolerance for low-productivity jobs. According to HFS Research CEO Phil Fersht, an industry analyst, Hindustan Times quoted him as saying, "Clients are pushing 20–30 per cent price cuts on deals. AI is compelling the large service providers to restructure their people-intensive models." A World Economic Forum 2025 Future of Jobs report issued recently cautioned that 41 per cent of employers worldwide intend to cut their workforce in the next five years because of automation. Anthropic CEO Dario Amodei also stated that as much as 50 per cent of entry-level office work may be automated with next-gen generative AI tools.
The wave of layoffs in 2025 globally isn't caused by AI alone, but it is apparent that AI acts as a driver, augmenting existing business necessities. Economic forces, changing technology environments, skills gaps, and customer needs are all contributing toward transforming the labour force. As Christine Inge put it bluntly in her interview with CNBC, “Job losses will be extremely large. The only thing we can do as individuals is adapt.”