Mass layoffs in the tech industry have caught the sector by surprise, painting a grim picture of the once-popular field that employed millions.
In 2025 alone, over 209,838 tech workers lost their jobs, a steady but slowing trend from 2024 when 239,101 technology employees became unemployed.
During the period, almost every major technology company froze hiring and announced mass layoffs, leaving fresh graduates with little hope of securing employment and established tech professionals unsure about the future of their careers.
Why are tech companies firing employees?
Despite the job market remaining steady across various sectors, tech companies have continued to fire employees at rates unseen before.
Currently, there are 1.5 job openings for every job seeker, with millions of positions unfilled, suggesting that the ongoing tech layoffs are not representative of the general job market.
This usual phenomenon has raised the question, “Why are tech companies firing more employees than their counterparts in other industries?”
Overcorrection of the COVID-19 hiring frenzy.
Unlike other sectors, the tech industry thrived during the pandemic. Subsequently, many technology companies entered into a hiring frenzy to keep up with demand as most services went online.
When the pandemic ended, and most workers returned to the office, tech companies found themselves unable to sustain the large workforces, forcing them to offload some of their most recent hires.
In addition, the pandemic allowed tech companies to experiment with remote workforces, resulting in many outsourcing their services to foreign remote workers at a fraction of the cost.
The collapse of the Metaverse.
Many tech companies, including Microsoft, Google, and Meta, overinvested in the Metaverse in both infrastructure and human resources.
When the idea flopped, many employees specifically hired to work on Metaverse projects were offloaded, triggering mass layoffs across the tech landscape.
For example, Microsoft shut down Bonsai, a metaverse startup it acquired to position itself as the industry leader.
Software developers are losing jobs to AI.
Major technology companies such as Microsoft, Google, and Facebook have adopted artificial intelligence, with over 25% of code now written using AI. The increased adoption of AI has resulted in less demand for junior and mid-level software developers, eventually resulting in job losses.
Speaking at LlamaCon AI developer event in Menlo Park, California, Meta CEO Mark Zuckerberg stated that the company intends to use AI for half of its programming tasks in 2026.
During the same event, Microsoft co-founder Bill Gates revealed that Redmond was using AI for up to 30% of its programming tasks.
According to a new study by Stanford University, up to 20% of young software developers were losing their jobs to AI.
Even OpenAI CEO Sam Altman has acknowledged that AI could soon perform 85% of his duties, eventually allowing him to step aside.
Altman believes that in a few years, “You’ll have billion-dollar companies run by two or three people with AI.”
According to the OpenAI CEO, it would be a huge embarrassment if his company were not the first to be run by AI.
“Shame on me if OpenAI is not the first big company run by an AI CEO, right?” he said. “I find this a very interesting thought experiment of what would have to happen for an AI CEO to be able to do a much, much better job of running OpenAI than me, which clearly will happen someday.”
Nevertheless, the AI takeover may not be as close as anticipated because of the trust that people place in human agents compared to AI.
Similarly, the nuanced understanding of human programmers, their ability to deal with problems without direct solutions, and their ability to deal with difficult and unsure clients make them indispensable in software development.
