Monday.com, a work management software company, has become the latest tech firm to announce layoffs, citing its shift towards an AI-driven growth strategy. The company will cut about 20% of its workforce, or around 600 employees, as part of a restructuring plan. This move is part of a larger trend in the tech industry, where companies are funnelling hundreds of billions of dollars into AI data center buildouts, leading to significant job cuts.

According to a Financial Times analysis, US tech companies have slashed nearly 140,000 jobs since the start of the year, with Amazon, Oracle, Meta, and Microsoft accounting for almost 50,000 of those cuts. Interestingly, companies that have cited AI as a factor in their job cuts have underperformed the Nasdaq by almost 10% in the 30 trading days following their announcements.

Despite the bleak picture, some AI-focused companies like Anthropic and OpenAI are hiring rapidly, absorbing some of the talent shed elsewhere in the industry. Additionally, some companies making cuts are shifting their headcount rather than eliminating it entirely, with Meta moving around 7,000 employees into new AI-focused roles even as it laid off 8,000 others. Other companies like IBM are tripling their entry-level hiring for AI and hybrid-cloud roles, indicating a shift in the industry's focus towards AI and emerging technologies.

Source: TechCrunch