AI Layoffs Are Spreading Faster Than Expected

AI layoffs are accelerating – and they’re spreading across the economy.

Fintech. Enterprise software. Crypto. Now traditional banking.

Different industries, same message: fewer people are needed to do the same work.

Not long ago, we detailed Jack Dorsey’s 40% headcount cut at Block (XYZ) and argued it would go down as a crossing of the Rubicon – the moment AI moved from productivity talking point to pink slip. 

Assuming the trend continued, we modeled a potential range of 8–13% structural unemployment for the U.S. economy, on par with the worst recessions of the last 100 years. 

We warned that the cascade would start in fintech and spread outward from there, ultimately sweeping through the entire knowledge economy.

Well, it has been about three weeks since then.

And unfortunately, the pace is accelerating faster than we expected.

The AI Layoffs Scorecard: What Just Happened

Let’s take inventory of what has happened since we last discussed AI-driven layoffs because the landscape is changing swiftly.

On March 11, Atlassian (TEAM) – the Australian enterprise software giant behind Jira and Confluence – announced it was cutting 1,600 employees, with over 900 layoffs aimed directly at software research and development. CEO Mike Cannon-Brookes wasn’t quite as blunt as Jack Dorsey in his approach, but he came close:

“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.”

The market rewarded the move, with the company’s stock rising 1% after the announcement.

Now, it’s not like Atlassian is some struggling startup. Cloud revenue growth accelerated to 25%-plus, RPO growth is running at 40%-plus, and the firm counts more than 600 customers who spend over $1 million annually. 

This is an already-healthy company choosing to be leaner. 

Healthy Companies Are Cutting Anyway

Atlassian isn’t an isolated case. Many of the companies making these cuts aren’t under pressure – they’re choosing to operate differently.

Snowflake (SNOW) laid off its entire technical writing and documentation department. 

The news followed the announcement of a $200 million partnership with OpenAI, which included an autonomous agentic platform capable of drafting complex API documentation directly from source code in minutes – work that previously required human teams weeks to accomplish. The department didn’t just get cut – it got replaced – by the very product the company provides.

If you wanted a cleaner illustration of the mechanism, you could not invent one.

This pattern continues to spread.

The Template Is Being Copied

The Winklevoss twins’ crypto exchange started the year with roughly 700 employees – and has spent two months systematically eliminating 30% of them. This line from their shareholder letter is likely to be remembered:

“AI is now too powerful not to use at Gemini. Not using AI at Gemini will soon be the equivalent of showing up to work with a typewriter instead of a laptop.”

Following suit, Crypto.com‘s CEO Kris Marszalek posted on X: “We are joining the list of companies integrating enterprise-wide AI. Companies that do not make this pivot immediately will fail.” 

Unlike most corporate rhetoric, this one has real implications.

Now, here’s the headline that stopped the financial world in its tracks. Reuters reported, citing three sources familiar with the matter, that Meta (META) is planning sweeping layoffs that could affect 20% or more of the company. Meta employs nearly 79,000 people. Twenty percent is roughly 15,700 jobs.

Meta’s spokesperson called it “speculative reporting about theoretical approaches.” Wall Street called it a reason to buy; Meta’s stock climbed nearly 3% on the report. 

The company that is allegedly about to lay off 15,000 people saw its market cap go up. The mechanism is playing out in real time. Dorsey set the template. Every CEO in America watched what happened to Block’s stock, and they are drawing the same conclusion.

Back in January, Zuckerberg himself said he was starting to see “projects that used to require big teams now be accomplished by a single very talented person.” That’s not a man who is going to defend a 79,000-person headcount for long.

From Tech to Finance: The Spread Begins

What started in tech is now moving into more traditional sectors, as we suspected.

Financial services firm HSBC Holdings (HSBC) is weighing deep job cuts over the coming years. CEO Georges Elhedery is looking to AI to shrink the company’s middle and back offices – one of the first signs of how the technology could reshape Wall Street workforces. The potential cuts could affect around 20,000 roles, or roughly 10% of the bank’s global headcount, over the next three to five years, targeting non-client-facing positions in global service centers.

Twenty thousand bankers. Compliance. Operations. Data processing. The unglamorous but enormous layer of human labor that keeps the global financial system running – increasingly automated.

And Goldman Sachs (GS) and Citi (C) are considering similar moves. Goldman’s CEO David Solomon has been talking about an AI-driven operating system called “OneGS 3.0” and has tightened performance criteria specifically in light of AI capabilities. Insiders say cuts could be announced as soon as April.

The Running Tally

These numbers are still small relative to the 50 million-person knowledge economy we modeled.

The displacement has just begun. But the pace of announcement is accelerating, and the gap between “announcement” and “execution” is shrinking.