US sees largest wave of job cuts since 2020 pandemic, AI among key triggers

India Today

a day ago

The US is witnessing a record number of job losses, and companies adopting AI might be one of the factors. In the first half of 2025 alone, companies announced 744,308 job cuts across the US, the highest since the first six months of 2020, when nearly 1.6 million jobs were lost due to Covid disruptions. That it is mostly entry-level and routine roles which are being substituted, points to the silent killing of jobs by AI.advertisementThe figures come from outplacement firm Challenger, Gray & Christmas, as reported by American broadcaster CBS.Microsoft confirmed on July 2 that it was cutting just under 4% of its workforce, roughly 9,000 people, in what is now its second major round of lay-offs this year.
While Microsoft has not disclosed an exact headcount, it reported having 228,000 full-time employees as of June 2024. Based on that number, a 4% reduction would affect around 9,000 workers.However, this year alone has seen at least three separate rounds of layoffs at Microsoft, raising questions about whether recent hiring has kept pace with the jobs being cut.Several major companies are cutting jobs in 2025 as part of broader restructuring efforts or store closures. Firms like Del Monte, At Home, and 23andMe have filed for bankruptcy this year, reflecting the pressure across sectors.Tech companies such as Meta and Bumble have also laid off employees, while more businesses are beginning to downsize as AI increasingly replaces entry-level and routine roles.US federal agencies have also been hit particularly hard in 2025, following aggressive cost-cutting led by Elon Musk's Department of Government Efficiency. The tech, retail, media, and non-profit sectors have also seen large-scale job losses.IS AI BEHIND MASSIVE LAY-OFFS IN THE US?One of the drivers behind Microsoft's restructuring is its ongoing and massive investment in AI. The company is pouring tens of billions into infrastructure, including data centres and custom computer chips to support its AI ambitions. It expects these efforts to cost around $80 billion for the previous fiscal year. The new fiscal year began this week.AI is already deeply embedded in Microsoft's operations. Earlier this year, CEO Satya Nadella revealed that artificial intelligence now generates between 20% to 30% of all the code written by the company's developers.According to Challenger, Gray & Christmas, several forces are fuelling this wave of layoffs.The leading one is DOGE, or the Department of Government Efficiency, which the firm said has been responsible for nearly 287,000 job cuts so far this year.Layoffs led by DOGE spiked earlier this year at agencies like the Department of Health and Human Services, Department of Education, and USAID. Many others left through a deferred resignation programme.advertisement"This dramatic rise is largely due to significant reductions at federal agencies headquartered in Washington, DC," the firm noted in its report.The broader economic picture isn't helping either. A slowdown and shaky financial markets have driven another 154,000 layoffs this year. Trade tensions are playing a role too, with 2,000 job cuts directly linked to increased US tariffs on imports, according to the report.- Ends