The strongest explanation for the cutbacks is purely financial. Companies are redirecting cash or raised credit to fund data centres and their associated hardware costs, especially GPU racks. So, in that sense, AI is indeed \u201ctaking jobs\u201d but not because employees are being replaced by swathes of software that are more efficient at working than humans. Instead, headcounts are falling as technology companies attempt to protect their margins in order to reassure jittery boards and encourage outside (or at least circular) investment.<\/p>\n
In February Oracle announced a plan to raise $45 billion to $50 billion in 2026<\/a> through debt and equity to expand Oracle Cloud Infrastructure capacity for AI customers, among them OpenAI, xAI, Nvidia, and Meta. Oracle revenues from sales had risen, with quarterly revenue up 22% per cent to $17.2 billion as of March this year. Cloud infrastructure revenues were up 84%, although it\u2019s worth noting that the company\u2019s income from what technologists would term cloud services is combined in its filings with income from its SaaS offerings. Regardless, Oracle is moving profits from other business units to infrastructural investments because AI builds are incredibly expensive.<\/p>\n Amazon\u2019s latest earnings release said its cash flow fell sharply, from $38.2 billion to $11.2 billion on a trailing twelve month basis, which it said was driven primarily by an extra $50.7 billion in property and equipment purchases<\/a> [PDF]; that is, \u201cinvestments in artificial intelligence\u201d. When companies commit that sort of money to compute and facilities, headcount cuts are likely to follow as a finances and margins tighten.<\/p>\n Payment company Block (previously Stripe) has made its rhetoric around AI causing job losses<\/a> more explicit than most, but its own disclosures still show more complex corporate finance in play. In its fourth quarter 2025 shareholder letter, Block reported full-year gross profit of $10.36 billion and said it was reorganising around faster execution, profitability, and the expected benefits of AI tools (note the use of the conditional phrasing). Markets rewarded the move because investors often welcome workforce reductions framed as efficiency. A company can say AI will make it leaner and use the claim to justify a headcount reduction that shareholders would welcome regardless.<\/p>\n Deeper research also contradicts an \u201cAI causes layoffs\u201d narrative. A Federal Reserve note<\/a> published in March 2026 reviewed current evidence and stated that very few firms in New York Fed regional surveys reported AI-induced layoffs in the previous year. The paper notes reduced hiring in some non-AI roles, some entry-level weakness in highly exposed occupations, and productivity gains in certain tasks which it terms AI-related. But it does not state there is a wave of AI replacing staff in multiple companies, instead using detailed, nuanced language to describe a real situation on the ground. This is at odds with the the language used publicly by big technology firms.<\/p>\n The current conjecture, one with which the Federal Reserve concurs, is that some entry-level positions may look vulnerable in the coming years, and firms are likely to use AI as a reason to ask more from smaller teams. But the evidence in cases of mass layoffs points strongly to different conclusions from the statements made by corporate leaders.<\/p>\n The technology sector is investing massively in data centres, graphics processors, custom chips, and even power sources, thanks to what it paints as a massive, unfulfilled demand for AI. When companies stretch to finance the sort of spending required for AI build-outs (with many big players in the AI sector raising extra funds on credit), labour becomes the most immediately-adjustable cost. While workers are told that AI made them obsolete, the more immediate cause is management choosing to expand its infrastructure commitments to hedge a future bet.<\/p>\n What the evidence shows is that companies with strong or improving revenues from other sources than AI (SaaS, traditional cloud computing, databases, ERP, software licences, advertising revenues, retail, etc.) are making aggressive capital bets on AI infrastructure, then reducing payroll to partially absorb the costs and create a leaner company for an uncertain future.<\/p>\n Reduced wages bills will help companies when their investors\u2019 loan repayment demands come due \u2013 typically, when the data centres actually come online. These are events slow in the arrival: Of the $241bn earmarked for data centre construction in the US, only a third of planned capacity is currently under construction<\/a>, thanks to the need for highly specialised contractors, problems sourcing labour, and push-back from local communities.<\/p>\n In the meantime, the layoffs are real, and lives are affected, but the explanations offered are too neatly aligned with AI\u2019s advertised abilities. Coincidentally, by raising the spectre of a technology able to replace human workers, the big technology companies suggest to every organisation that they too could reduce their headcount by investing in the AI platforms. As such, then, the \u201cAI takes humans\u2019 jobs\u201d statements are a sales pitch for the companies\u2019 services.<\/p>\n (Image source: \u201c23rdian\u201d by ion-bogdan dumitrescu is licensed under CC BY-NC 2.0. To view a copy of this license, visit https:\/\/creativecommons.org\/licenses\/by-nc\/2.0)<\/p>\n \u00a0<\/p>\n Want to experience the full spectrum of enterprise technology innovation? Join TechEx<\/a> in Amsterdam, California, and London. Covering AI, Big Data, Cyber Security, IoT, Digital Transformation, Intelligent Automation, Edge Computing, and Data Centres, TechEx brings together global leaders to share real-world use cases and in-depth insights. Click here<\/a> for more information.<\/p>\n TechHQ is powered by TechForge Media<\/a>. Explore other upcoming enterprise technology events and webinars here<\/a>.<\/p>\n Joe Green is a writer based in Bristol, UK. He acquired his first Mac and dial-up modem in 1992 and has worked in the tech industry since 2000. He writes and podcasts, specialising in open-source, networking, cybersecurity, software development and online privacy.<\/p>\n View all posts <\/a> <\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Technology companies lay off workers under the guise of AIs replacing humans.Funds from profitable areas of businesses ploughed…\n","protected":false},"author":2,"featured_media":779,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,25,1069,39],"class_list":{"0":"post-778","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ai","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-big-tech","11":"tag-data-centers"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=778"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/778\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/779"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/04\/techhq-expo.png\"\/)
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