Using AI as a pretext for layoffs: an amplified "battle royale".

Author: Nancy, PANews

The more heated the AI ​​war becomes, the more anxious humanity becomes.

As effective accelerationism becomes Silicon Valley's guiding principle, AI is exhibiting an astonishing rate of evolution, and the ensuing wave of business activity is fueling talk of unemployment. Layoffs are occurring in waves, from Silicon Valley giants to major Chinese companies, from traditional finance to the crypto market; the AI ​​panic seems to be escalating.

However, this wave of layoffs is more of a belated reckoning with the expansion bubble under the guise of AI.

From Wall Street giants to the crypto world, AI is being streamlined.

The global technology industry is undergoing an unprecedented "slimming down," and the name of AI is becoming a "legitimate" reason for this wave of layoffs.

According to statistics from the UK-based financial research firm RationalFX, the global technology industry lost over 45,000 jobs in the first quarter of 2026 alone, with at least 20% attributed to AI. In comparison, AI-related job losses accounted for less than 8% in 2025. This trend is accelerating, with the total number of layoffs expected to exceed 260,000 for the year.

Wall Street was the first to press the "streamlining button." Amazon, Morgan Stanley, Goldman Sachs, JPMorgan Chase, Citigroup, BlackRock, Meta... whether financial giants or technology pioneers, they all unanimously initiated layoffs.

China, another major player in the AI ​​arena, has not been spared either. Well-known internet giants such as Tencent, ByteDance, NetEase, Bilibili, and Baidu have all adjusted their team structures.

The crypto community has also witnessed a wave of AI-driven layoffs, with projects such as Block, Gemini, Crypto.com, and Algorand announcing downsizing this year. Block, in particular, announced a massive 40% reduction in its workforce, citing that AI has changed the meaning of building and operating a company.

Panic is spreading globally. From the doomsday narrative of "AI replacing humans" in "The Global Intelligent Crisis of 2028" to the "AI Career Risk Map" released by AI expert Karpathy that went viral online, this unease is rapidly sweeping the world.

It seems that as long as AI continues, layoffs may also continue.

The victory of Silicon Valley's "accelerationism" – ending AI anxiety

This rapid iteration of AI was first ignited in Silicon Valley.

In Silicon Valley, AI is mainly divided into two camps:

• Effective accelerationism (e/acc) is an emerging philosophical movement that strongly advocates technological development, promotes unconditional acceleration of technological innovation, and even aims to subvert social structures.

• Effective altruism (EA) advocates for the development and application of technologies that maximize positive social impact while minimizing potential harm.

Two forces are vying for power in Silicon Valley.

Sam Bankman-Fried (SBF), the founder of FTX and a well-known figure in the crypto world, was a vocal advocate of effective altruism and an early investor in Anthropic, an AI giant in the same camp. However, the collapse of FTX in late 2022 led to serious questioning and ridicule of this philosophy.

On the other hand, there's a Sam in the AI ​​world—OpenAI founder Altman—who is an optimist. Elon Musk, a follower of effective altruism, was one of the co-founders of OpenAI, but left due to differences in strategy. Subsequently, Altman raised funds rapidly, burned through cash quickly, and launched the generative AI ChatGPT in 2022. At the time, this product was hailed as the fastest-adopted consumer product in history, and it also pushed Silicon Valley towards an accelerationist approach.

During this process, OpenAI also experienced a globally shocking power struggle due to the conflict between accelerationism and securityism. Ultimately, Altman emerged victorious and returned, an event that became a significant turning point in the development of AI.

Since then, effective accelerationism has become increasingly popular, serving as a guide for action among Silicon Valley elites. AI has begun to be commercialized at full speed and is moving towards large-scale implementation.

Karpathy used AI to assign replacement risk scores to 342 occupations in the United States. In this visualization, green represents safe jobs, while red signifies large-scale automation. Jobs involving computer use and primarily digital information processing have higher AI exposure scores; outdoor manual labor and jobs requiring real-world interaction (such as electricians and plumbers) have significantly lower scores. However, a high score does not necessarily mean unemployment, but rather a higher risk of being replaced by AI.

However, according to Nvidia CEO Jensen Huang, AI will not only not cause unemployment, but will also increase productivity and create more job opportunities. Venture capital firm a16z believes that history has repeatedly proven that automation will not lead to permanent mass unemployment, and AI will enhance rather than completely replace humans. A recent report from Morgan Stanley points out that AI will not lead to large-scale permanent unemployment, but will change the employment structure.

Block's rehiring case also confirms this viewpoint, as the first batch of laid-off employees have already been recalled.

Several Block employees reported on LinkedIn that they received invitations to return to work, citing reasons including "clerical errors" and a shortage of staff for critical infrastructure. CEO Jack Dorsey previously admitted that the layoff decision may have been flawed, while some laid-off employees believe that the layoffs were more aimed at boosting investor confidence than simply due to considerations of AI replacement.

Using AI as a pretext to carry out corrective actions

AI is fueling FOMO (Fear of Missing Out) sentiment and is also seen as a spreading collective anxiety. However, this wave of layoffs is more like a "belated correction."

A recent study by Oxford Economics points out that while there are individual cases of AI replacing certain jobs, macroeconomic data does not support the view that automation will trigger structural changes in employment. Companies do not appear to be using AI on a large scale to replace employees; instead, they may be using the technology as a shield for routine layoffs.

Compared to acknowledging traditional operational mistakes such as weak consumer demand or previous over-hiring, attributing layoffs to AI applications sends a more positive signal to investors.

Laura Ullrich, head of economic research at the recruitment platform Indeed, also pointed out in a recent interview that this is related to the over-hiring or hiring boom that has emerged in the post-pandemic era. CEOs are indeed privately admitting that their companies are "still too big and their organizations are too bloated."

During the pandemic, major global economies entered an era of large-scale easing, and the online economy expanded rapidly, creating a large number of "special needs jobs." Many leading companies doubled or even more in size during this period, and generous salary increases and large-scale expansion became the norm.

However, as the economy gradually returns to normal, job demand has begun to decline, while the Federal Reserve's interest rate hikes, high interest rates, and weak consumer spending have also slowed economic growth. More technology companies are beginning to realize that their blindly expanded workforce of the past few years has become redundant and must be scaled back.

The same applies to the crypto market. Pandemic-driven monetary easing and low interest rates fueled a huge bubble. As market liquidity tightened, projects faced increased pressure to survive, and coupled with a continued market downturn, layoffs became an inevitable adjustment. Jack Dorsey also admitted in response to the layoffs that the company did indeed over-hire during the pandemic.

It can be argued that the current large-scale layoffs are not solely triggered by AI, but rather are a combined effect of economic cycle regression and market correction. While AI does have a visible impact on certain specific jobs, it is more of a catalyst than a root cause.