On the same day that Meta and Microsoft announced a combined 20,000+ job cuts, both companies reaffirmed their plans to massively increase AI spending. That’s not a coincidence — it’s the new normal.
The numbers
Meta is cutting 10% of its workforce: roughly 8,000 jobs, effective May 20. On top of that, 6,000 open positions are being scrapped. In a memo to employees, the company cited ‘continued efforts to run the company more efficiently and offset other investments we’re making.’ Capital expenditure guidance for 2026? Between $115 and $135 billion — nearly double the $72 billion spent in 2025.
Microsoft is taking an unusual route: for the first time in its 51-year history, the company is offering voluntary buyouts. Around 7% of US employees — about 8,750 people — are eligible under a ‘Rule of 70’ formula: if your age plus years of service add up to 70 or more, you qualify. Notably, AI and Copilot teams are explicitly exempt.
The bigger picture
The numbers go far beyond Meta and Microsoft. Over 92,000 tech workers have lost their jobs in 2026 so far — bringing the total to nearly 900,000 since 2020. Amazon has cut at least 30,000 positions since October, Snap slashed 16% of its workforce, and Nike cut 1,400 jobs concentrated in its tech department.
‘This represents a fundamental structural shift rather than a temporary market correction,’ says Anthony Tuggle, an executive coach with an AI background.
50-person unicorns
In the startup world, a clear pattern is emerging: companies are growing far faster with far fewer people. VCs report that startups with 50 employees can now reach $50 million in revenue — that used to require 250 people.
‘Do I think there are going to be 50- or 100-person unicorns and decacorns? Absolutely,’ says Zach Bratun-Glennon, partner at Gradient. ‘Can you build a public company with 200 employees? Absolutely.‘
What this means for us
Tech optimists argue that new technologies have always created new jobs. Mobile app developers didn’t exist before smartphones. True. But the gap between job destruction and job creation is getting uncomfortably wide. Glassdoor’s Employee Confidence Index shows the largest year-over-year drop in confidence of any industry — down 6.8 percentage points in the tech sector.
Fewer people are quitting voluntarily, fearing an unstable market. And paradoxically, that means companies are being more aggressive about pushing people out.
The irony is hard to miss: the industry building AI is the first to feel its consequences.
Sources: CNBC: 20,000 job cuts at Meta, Microsoft raise concern of AI labor crisis · CNBC: Meta will cut 10% of workforce · CNBC: Microsoft plans first voluntary retirement program