The topic Tech industry lays off nearly 80,000 employees in the first quarter of 2026 — almost… is currently the subject of lively discussion — readers and analysts are keeping a close eye on developments.
This is taking place in a dynamic environment: companies’ decisions and competitors’ reactions can quickly change the picture.
Some experts argue that AI was just used as an excuse for poor business decisions.
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78,557 workers in the tech industry have reportedly been laid off from January 1 to April 2026, with more than 76% of the affected positions located in the U.S. Nikkei Asia reports that 37,638 of these cuts, or 47.9%, have been attributed to the reduced need for human workers because of AI and workflow automation. Despite that, Cognizant Chief AI Officer Babak Hodjat says that it will still take more than a year before we completely see the impact of modern AI technologies on the workforce.
“I don’t know if they are directly related to actual productivity gains,” Hodjat told Nikkei in reference to the job cuts. “Sometimes, you know, AI becomes the scapegoat from a financial perspective, like when a company hired too many, or they want to resize, and it gets blamed on AI.” Despite that, he said that AI-driven layoffs could still happen, but that it would take another six months to a year “before companies start seeing real productivity gains from AI,” and that “it will be painful for all of us as we’re going through it, and simply because it’s a transition.”
This does not bode well for the industry, which has already been reeling from layoffs. Oracle has quietly cut more than 10,000 positions recently, with the savings purportedly allocated to data center funding. Many institutions and industry leaders have already been warning about AI-driven layoffs, with Anthropic CEO Dario Amodei and Ford CEO Jim Farley saying that the technologies will wipe out half of entry-level white-collar jobs in the U.S. A Stanford study saw many entry-level coding and customer service jobs are already being affected, with an MIT simulation showing that AI can replace nearly 12% of the U.S. workforce, amounting to nearly $1.2 trillion in lost salaries.
Despite all these analyses, some experts are pushing back against this narrative, pointing out that AI-driven layoffs were just being used as an excuse for poor business performance. OpenAI CEO Sam Altman said during the India AI Impact Summit, “I don’t know what the exact percentage is, but there’s some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there’s some real displacement by AI of different kinds of jobs.” While they say that some of these layoffs would still happen with or without AI, there’s still a consensus that the technologies would have an impact on jobs and that we should be ready for a disruption.
Still, there are a few companies that are bucking the trend. IBM has reportedly tripled its entry-level hiring in 2026, saying that while AI can do many entry-level jobs, it still needs a human touch. Furthermore, while cutting entry-level jobs would deliver short-term savings for any organization, it comes with the risk of erasing the pipeline needed to train future experienced workers and mid-level managers. This is backed up by data from the EU, which showed that companies that deployed and invested in AI are likely to hire more people.
Even Cognizant, whose business process outsourcing operations rely mostly on people, have started working on AI technologies. It built AI labs in San Francisco and Bengaluru and have started developing custom AI agents for its clients, especially as many of them found that off-the-shelf services do not work well in the corporate setting due to performance or security issues. Despite the development of more capable and suitable AI agents, Hodjat said that the company does not expect to lay off staff. Instead, it will train them in the use of these tools, and there are even plans to hire more junior roles.
“There’s going to be a ton of people that are coming out of school that can’t find a job and don’t have the domain expertise,” Hodjat told Nikkei. “You have to bring them in. You have to have them learn on the job, on how to use AI within the various domains.”
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Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.
