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Tech layoffs, which consistently declined in 2024, seem to have come back to haunt millions of professionals in 2025. The first month of 2025 has recorded considerably more job cuts than December 2024. Meta, Amazon, and Microsoft have announced layoffs and even begun their cost-cutting measures. Hence, the months ahead may have more layoffs in store.
As of January 31, about 25 IT companies have sacked 5,461 workers. Compared to December 2024, this is a significant rise.
Following the economic slowdown in 2023, last year showed signs of recovery based on the increase in demand for tech products and services. This also likely led companies to hire again or retain existing staff. In 2025, numerous factors could lead to more layoffs or even potential job creation en masse. According to the World Economic Forum (WEF) report, 92 million jobs are set to be displaced, and about 170 million new jobs will be created globally. Considering the developments in January with big tech announcing layoffs, we may be off to a bumpy start.
The recent developments in the tech sector seem to have set the tone for the year. On Thursday, it was reported that Google, the Alphabet-owned company, has offered some of its employees the option to leave voluntarily. The company has set up a voluntary exit programme for members of the Android and Pixel teams, and also for employees involved with other projects. Reportedly, anyone deciding to take up the offer will get a guaranteed severance package. Such exit programmes can spell more rounds of layoffs in case enough employees do not opt to exit.
Last week, Amazon cut dozens of jobs in its communications department. The e-commerce giant announced that it would make some changes to the communications and corporate responsibility teams to “move faster, increase ownership, strengthen culture, and bring teams closer to customers.” While the exact number of layoffs at Amazon is unknown, the company has cut thousands of jobs since the pandemic.
Among the big names, Meta has announced the biggest layoffs in January. The Mark Zuckerberg-led social media giant announced that it will slash five percent of its workforce, which is about 3,000 employees. Similarly, another US-based e-commerce giant, Wayfair, announced that it was pulling out its operations in Germany, laying off as many as 730 of its staff.
Most layoffs have been owing to companies taking the route of restructuring their operations and cutting costs. However, with the world undergoing tumultuous economic changes, especially in the US – with Donald Trump’s return to the White House, shifting dynamics among big tech leaders, and a renewed AI arms race between the US and China – more layoffs may be in store.
The tech landscape could witness a landfall change under the Donald Trump administration. Trump’s dramatic return as the president of the United States has brought in a new rigour to Silicon Valley. Elon Musk, who has been an ardent supporter of Trump, has been among the key flagbearers of this change. Musk’s acquisition of X and eventual job cuts at the microblogging site underscores his style of leadership, which is effective, if not ruthless. Trump, who has been aggressively against what he believes is bureaucracy and needless government spending, seems to agree with Musk’s way of cutting costs and aiming for a leaner and more productive workforce.
In their bid to appease the incumbent president, more tech leaders and organisations may attempt to tow the line and adopt a stringent outlook towards spending and layoffs. The change is unfolding as the likes of Meta’s CEO seem to favour a more hostile view on layoffs and obtaining maximum productivity with leaner teams. Earlier this year, Meta announced that it was sacking five per cent of its workforce, focusing on the “lowest performing workers”. Zuckerberg’s recent comments also show his change in demeanour ever since Trump’s ascension. Firstly, he announced some sweeping changes to Meta’s content moderation policy and tossed the company’s Diversity, Equity, and Inclusion (DEI) programmes, in line with Trump’s brazen opposition to such initiatives. His comments on a podcast with Joe Rogan about the need for masculine energy at workplaces. In Meta’s internal meeting on January 30, while responding to concerns about imminent layoffs, Zuckerberg said, “The right thing to do is just rip the band-aid off [..] I think, in a lot of ways, it is a nicer thing to do for people who are probably not going to end up making it anyway.”
Another telltale sign of this shifting dynamic is Bill Gates’s comments on Trump, whom he met earlier this month for a three-hour dinner. Gates later expressed that he was impressed with Trump’s interest and enthusiasm in a range of topics they discussed. Despite the chummy interaction, in the past, Gates has been critical of the 78-year-old billionaire-turned-politician. Reportedly, Gates donated $50 million to a group supporting former VP Kamala Harris’s presidential campaign against Trump in 2024.
Ever since coming to office, the Trump administration has initiated efforts to downsize the federal workforce, offering them eight months of severance to resign voluntarily, a strategy that was once put in motion by Musk after acquiring Twitter in 2022 and now most recently adopted by Google. Trump’s stance on DEI is already being exercised by the likes of Meta, and more are likely to follow suit. With Trump at the helm, his policies are likely to reshape various aspects of the regulatory environment. While layoffs are imminent, the impact of Trump’s policies within the private sector will largely depend on how they interact with existing industry trends and company-specific decisions.
On the flip side, tech leaders who wish to get in the good books of the 47th President would likely offer more jobs. It needs to be noted that job creation within the US has been one of the key themes of Trump’s economic agenda. On the second day in office, Trump, along with OpenAI CEO Sam Altman, SoftBank CEO Masayoshi Son, and Oracle co-founder Larry Ellison, announced the Stargate Project. The initiative worth $500 billion is aimed at building AI infrastructure within the US, promising over 100,000 American jobs. “This project ensures that the United States will remain the global leader in AI and technology, rather than letting competitors like China gain the edge,” Trump said.
At the same time, Trump also wants to reign as the “first crypto” president of the US. The POTUS has already dismantled the Central Bank Digital Currency and is aiming for supportive policies and clearer regulations, which would prompt more investments and the establishment of startups. This could likely lead to more jobs in sectors like technology, finance, and legal services.
Chinese AI startup DeepSeek emerging from obscurity to wipe off $1 trillion from the global market, is yet another seminal moment that will define how tech companies will approach innovation. DeepSeek, which released its AI models DeepSeek-V3 and DeepSeek-R1 in January, came over like a tsunami, and the aftermath has shaken the fundamentals of tech innovation to the core. Widely held beliefs like more investments meant better products and services seem to have been dismantled.
The Chinese company has delivered state-of-the-art AI models at a fraction of the cost invested by OpenAI, Meta, or Google to build frontier models. Moreover, reportedly, DeepSeek hired PhD students from premier Chinese universities and did not spend on experienced developers or engineers. DeepSeek’s achievements are exemplary, and tech companies around the world are more likely to take cues from them. Even though Meta has acknowledged the merits of DeepSeek, the company asserted that it has no qualms about its heavy investments in AI that are underway. However, for many tech companies, DeepSeek’s runaway success may prompt it to reorient its spending and hiring patterns. Many may pursue similar goals as DeepSeek in their vision to achieve productive outcomes; there may even be companies that may want to cut job roles and even create new roles.
The recently released International AI Safety Report, suggests that the rise of general-purpose AI is likely to eliminate many jobs and even create some new roles. General-purpose AIs are systems that are capable of performing a wide range of tasks across domains. For example, ChatGPT can be called a general-purpose AI. As part of the report, one of the studies estimated that in advanced economies, 60 per cent of current jobs could be affected by today’s general-purpose AI systems. While in emerging economies, the share is down to 40 per cent.
According to the report, AI could also boost worker productivity, especially in areas such as consulting, legal work, and programming. This boost in productivity is likely to lead to wage increases in some sectors. When it comes to gender, the report states that women may be more vulnerable to AI-driven job automation than men, with twice as many women’s jobs at risk worldwide compared to men’s.
On the other hand, the Future of Jobs Report 2025 by the WEF states that 39 percent of current skills are likely to become outdated by 2030. As many as 85 percent of employers plan to prioritize reskilling their workforce, and 59 percent of workers globally will require training by 2030. Going forward, technology-related skills such as AI, big data, and cybersecurity are among those that may help upskill many.
