The idea that artificial intelligence (AI) will change how companies work is no longer a distant prediction. It is already showing up in tech and other sectors. In recent months, several companies have announced layoffs pointing to AI as a key reason behind the cuts.
Snap, the parent company of social media platform Snapchat became the recent example, which is planning to cut around 1,000 roles, citing efficiencies gained through AI. announcing the job cuts, Evan Spiegel, Snap’s co-founder and CEO told the employees that the company will be using AI tools to “reduce repetitive work and increase velocity,” as “small squads” of employees have been doing in recent months.But Snap is not alone. Across the tech industry and beyond, executives are increasingly linking job reductions to automation, AI tools, and changing business needs.
While companies say these moves are about becoming faster and more efficient, they also reflect a deeper shift in how work is being done. Others like Salesforce CEO Marc Benioff and OpenAI CEO Sam Altman have different view on AI-driven layoffs stating that companies are using AI as an excuse to cut costs.
Criticizing companies, Altman described it as ‘AI washing’ – falsely blaming AI for layoffs driven by cost-cutting.
In this article, we take a look at companies and CEOs who blamed AI for layoffs in recent months.
Snap cuts 1,000 jobs as company leans into AI
As mentioned before, Snap recently announced to cut 16% of its global workforce, impacting around 1,000 full-time employees. CEO Evan Spiegel broke the news in an internal memo earlier this week, also closing over 300 open roles in the process. Snap had about 5,261 full-time employees as of December 2025. In the memo, Spiegel wrote:“Dear Team,Today we are announcing changes that will impact approximately 1,000 team members at Snap, including 16% of our full time employees, in addition to closing more than 300 open roles. This is an incredibly difficult decision, and I am deeply sorry to the colleagues who will be leaving us. You have made important contributions to Snap, and we are committed to supporting you through this transition.Last fall, I described Snap as facing a crucible moment, requiring a new way of working that is faster and more efficient, while pivoting towards profitable growth. Over the past several months, we have carefully reviewed the work required to best serve our community and partners, and made tough choices to prioritize the investments we believe are most likely to create long-term value. As a result of these changes, we expect to reduce our annualized cost base by more than $500 million by the second half of 2026, helping to establish a clearer path to net-income profitability.While these changes are necessary to realize Snap’s long-term potential, we believe that rapid advancements in artificial intelligence enable our teams to reduce repetitive work, increase velocity, and better support our community, partners, and advertisers. We have already witnessed small squads leveraging AI tools to drive meaningful progress across several important initiatives, including Snapchat+, enhanced ad platform performance, and efficiency improvements in our Snap Lite infrastructure.If you are part of our North America team, please work from home today. In the US, impacted team members will receive an email notification within the next hour, including information about next steps. For non-US locations, you will receive additional details about next steps from leadership and HR.To our departing colleagues: thank you. Your hard work has helped shape Snap, and we are deeply grateful for your contributions. For U.S.-based team members who are leaving, we will provide four months of severance, healthcare coverage, and equity vesting, along with career transition support. Outside the U.S., we will follow local processes and seek to provide comparable support aligned with local norms.To everyone continuing on this journey: change of this magnitude and at this speed is never easy and it will not be seamless. Thank you for your resilience, compassion, and commitment to one another, and to the community and partners we serve. Our responsibility is to move forward with clarity, empathy, and determination as we build a faster, stronger, and more durable Snap for the long term.Evan”
Block cuts 4,000 jobs, CEO Jack Dorsey cites advances in AI
Earlier this year, Jack Dorsey’s Block laid off around 4,000 employees which is nearly 40% of its workforce citing advances in AI as a main reason for the restructuring.
CEO Jack Dorsey told the investors that “a smaller team using the tools we’re building can do more and do it better. CEO Dorsey then announced “salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition”.
In the memo sent to Block laidoff staff, Dorsey said that the job cuts are being made because of the company’s “trouble”.
Instead, “gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. But something has changed,” he stated. Here’s the full memo by Block CEO Jack Dorsey:Today we’re making one of the hardest decisions in the history of our company: we’re reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are being asked to leave or entering into consultation. i’ll be straight about what’s happening, why, and what it means for everyone.first off, if you’re one of the people affected, you’ll receive your salary for 20 weeks + 1 week per year of tenure, equity vested through the end of may, 6 months of health care, your corporate devices, and $5,000 to put toward whatever you need to help you in this transition (if you’re outside the U.S. you’ll receive similar support but exact details are going to vary based on local requirements). i want you to know that before anything else. everyone will be notified today, whether you’re being asked to leave, entering consultation, or asked to stay.we’re not making this decision because we’re in trouble. our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.i had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter. repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead. i’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome. a smaller company also gives us the space to grow our business the right way, on our own terms, instead of constantly reacting to market pressures.a decision at this scale carries risk. but so does standing still. we’ve done a full review to determine the roles and people we require to reliably grow the business from here, and we’ve pressure-tested those decisions from multiple angles. i accept that we may have gotten some of them wrong, and we’ve built in flexibility to account for that, and do the right thing for our customers.we’re not going to just disappear people from slack and email and pretend they were never here. communication channels will stay open through thursday evening (pacific) so everyone can say goodbye properly, and share whatever you wish. i’ll also be hosting a live video session to thank everyone at 3:35pm pacific. i know doing it this way might feel awkward. i’d rather it feel awkward and human than efficient and cold.to those of you leaving…i’m grateful for you, and i’m sorry to put you through this. you built what this company is today. that’s a fact that i’ll honor forever. this decision is not a reflection of what you contributed. you will be a great contributor to any organization going forward.to those staying…i made this decision, and i’ll own it. what i’m asking of you is to build with me. we’re going to build this company with intelligence at the core of everything we do. how we work, how we create, how we serve our customers. our customers will feel this shift too, and we’re going to help them navigate it: towards a future where they can build their own features directly, composed of our capabilities and served through our interfaces. that’s what i’m focused on now. expect a note from me tomorrow.Jack
Altassain cuts 1,600 jobs, CEO says doing this to self-fund investment in AI
Australian software company Atlassian cut 10% of its workforce or 1,600 jobs last month.
The job cuts were announced as the company restructures following a decline in its stock price driven by AI developments. CEO Mike Cannon-Brookes sent a memo to employees informing them about the layoffs. “Our approach is not ‘AI replaces people.’ But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas.
It does,” CEO Mike Cannon-Brookes said in the memo.“This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future,” he added.“I believe this is the right decision for Atlassian. But that doesn’t mean it’s easy. Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today,” CEO Cannon-Brookes said.“We are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile.
We’re also changing the way we work and reorganising around our system of work to move faster,” he added.
Pinterest cuts 15% jobs as it reallocates resources to AI-focused teams
Earlier this year, Pinterest announced to lay off less than 15% of its workforce and reduce office space as the company looks to shift its resources toward artificial intelligence (AI) development and implementation. In a securities filing, Pinterest said it expects the cuts to be complete by the end of its third quarter in late September.
Pinterest shares slipped about 3% in premarket trading following the announcement, CNBC reported.The social media company said it’s “reallocating resources” to AI-focused teams and prioritising “AI-powered products and capabilities”. According to a proxy filing, Pinterest then had more than 4,500 employees worldwide as of April 2025. The company said it expects to record pre-tax restructuring charges of about $35 million to $45 million.In its SEC filing about restructuring, Wanji Walcott, the company’s chief legal and business affairs officer and corporate secretary, wrote, “On January 26, 2026, the Company announced the board-approved global restructuring plan (the “Plan”) that includes a reduction in force that is expected to affect less than 15% of the Company’s workforce as well as office space reductions. The Company anticipates incurring total pre-tax restructuring charges of approximately $35 million to $45 million, which are expected to be primarily cash-related expenditures.
The Company intends to exclude the restructuring charges from its non-GAAP financial measures, including Adjusted EBITDA.The Company is taking these actions to support its transformation initiatives, including but not limited to (i) reallocating resources to AI-focused roles and teams that drive AI adoption and execution, (ii) prioritising AI‑powered products and capabilities, and (iii) accelerating the transformation of its sales and go-to-market approach. Although the Company is reducing its overall staffing levels with these actions in the near term, the Company plans to reinvest in key development areas and strategic opportunities.
The Company expects to complete the Plan by the end of its third quarter ending September 30, 2026, subject to local law and consultation requirements.”
