technology
US tech firms have cut over 118,000 jobs in 2025, with California bearing the brunt as companies from Intel to Meta downsize in the face of economic pressures and AI disruption. Image by oki andri sandjaya from Pixabay

America's technology sector is facing one of its most severe contractions in recent memory. More than 118,000 tech jobs were eliminated in 2025, with California accounting for over half of the losses, according to layoffs data. fyi data

The wave of redundancies, led by companies such as Intel, Microsoft, Meta, HP, and Salesforce, reflects both deepening economic uncertainty and the rapid adoption of artificial intelligence, which is reshaping the workforce at a fast pace.

The latest wave marks a continuation of the tech downturn that began in 2022. At least 95,000 workers at US-based tech companies were laid off in mass job cuts in 2024, with the trend accelerating into 2025 as companies increasingly replace human workers with AI systems, Crunchbase reports.

California Bears The Brunt Of Tech Industry Bloodbath

California, long regarded as the beating heart of America's tech industry, has been hit the hardest, with 58,809 layoffs — roughly 51% of the national total. Washington State came next, with more than 25,000 roles shed. Entire innovation hubs from Silicon Valley to Seattle are feeling the strain, with knock-on effects rippling through local economies, according to Newsweek's analysis.

During the first two months of 2025, tech companies in the Bay Area slashed a net total of 8,700 positions, creating what economists describe as a 'huge shock' to the regional economy, GovTech reports. The South Bay lost 4,100 tech jobs whilst the San Francisco-San Mateo region shed 3,700 positions during this period.

Intel's Workforce Shrinks By A Third

Chip giant Intel has been the most aggressive, announcing over 33,000 layoffs, equivalent to nearly 31% of its global headcount. Intel CEO Lip-Bu Tan announced plans to cut approximately 25,000 jobs by the end of 2025, reducing the company's workforce from about 109,000 employees to 75,000 – representing roughly 23% of its global headcount, not the 31% originally claimed, according to The San Francisco Chronicle.

'There are no more blank checks,' Tan wrote in a memo to employees, Fortune reports. 'Every investment must make economic sense'.

The chipmaker's aggressive restructuring follows years of strategic missteps in the AI and semiconductor markets, where it has lost ground to rivals Nvidia and AMD.

Intel has already begun implementing these cuts, laying off more than 5,000 employees across California, Oregon, Arizona and Texas, with the largest concentration in Oregon where 2,392 workers face redundancy, according to Yahoo Finance.

Microsoft, Meta and HP Follow

Microsoft has also bled workforce, shedding more than 19,000 roles across various segments, including Xbox and management ranks. Meta has similarly cut at least 3,700 positions this year, with CEO Mark Zuckerberg saying the firm would deepen performance-based culls to accelerate 'low performers' out the door, CNBC confirmed.

However, laid-off employees have challenged this narrative, with some claiming they received positive performance reviews and were blindsided by the cuts. Workers on parental leave and those with years of exceeding expectations found themselves among those terminated, leading to accusations that the cuts were more about cost-saving than performance, Fortune investigation reveals.

HP and Salesforce have also announced sizeable reductions, citing the need to restructure operations and streamline support teams.

Artificial Intelligence Accelerates Cuts

The role of artificial intelligence in driving these layoffs cannot be overstated. Through the first half of 2025, over 20,000 US jobs were eliminated due to automation and 'technological updates,' including more than 10,000 cuts specifically blamed on AI implementation, according to industry analysis by TS2.

Salesforce exemplifies this trend dramatically. CEO Marc Benioff announced that the company has reduced its customer support staff by approximately 4,000, resulting in a headcount decrease from 9,000 to 5,000, as AI agents now handle over a million customer conversations. 'I need fewer heads,' Benioff stated bluntly on a recent podcast, noting that AI has reduced support costs by 17%, Salesforce Ben reports.

Microsoft followed suit with substantial cuts. The company laid off around 9,000 workers in early July, while Meta cut about 5% of employees in January, according to TechCrunch's comprehensive tracker. These firms join Oracle, HP, Workday, and dozens of other tech companies in what industry watchers describe as a structural transformation, rather than a temporary cost-cutting measure.

Beyond Numbers: The Human Cost Of Tech's AI Transformation

The impact extends far beyond statistics. Opportunities for software engineers have fallen 20% between October 2022 and July 2025, according to Stanford University research cited by Al Jazeera. Entry-level positions face particular vulnerability, with experts warning that AI could eliminate half of all junior white-collar jobs.

Economists warn that 'it is unlikely other Bay Area service and retail businesses will be immune from the fallout from these lost tech jobs', as reported by GovTech California. Entire tech hubs across California and the Pacific Northwest are experiencing economic ripple effects as thousands of well-paid workers lose their positions.

The Future Of Work: Adapting To An AI-Powered Industry

Industry analysts are increasingly viewing these layoffs not as a collapse, but as a fundamental restructuring. Companies are evaluating 'every single function' to determine where AI agents can take over, signalling that current cuts may represent just the beginning of a larger transformation, Fortune analysis suggests.

For workers, the message is clear: adaptation is essential. The most secure roles combine domain expertise with proficiency in emerging technologies, such as AI, machine learning, and data architecture. Traditional support roles, operations positions, and generalist mid-level jobs face the greatest risk of automation, according to UC Today's analysis.

As one industry expert noted, this represents 'an inflection point in the labour market' where AI has evolved from experimental tool to cost-cutting instrument, InformationWeek reports. The technology sector that once epitomised job growth and innovation now leads the charge in workforce automation, fundamentally reshaping not just Silicon Valley but the entire American economy.

The Road Ahead: Navigating Tech's New Reality

The ongoing disruption underscores technology's double-edged nature – creating unprecedented capabilities whilst displacing thousands of workers. As companies continue pivoting towards AI-driven operations, the human cost remains steep, with entire communities feeling the fallout from mass redundancies, The San Francisco Chronicle documents.

For those in vulnerable positions, upskilling towards AI-adjacent roles offers the clearest path forward. Yet questions remain about whether new opportunities will emerge quickly enough to absorb displaced workers, or if the tech industry's AI revolution will fundamentally reduce its need for human capital, as NerdWallet's analysis explores.

The transformation continues at breakneck pace, with industry leaders openly acknowledging that current layoffs likely represent just the beginning of a much larger shift. As 2025 unfolds, the technology sector stands at a crossroads, balancing the promise of innovation against its profound human impact, according to Computerworld's comprehensive timeline.

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