In the Name of AI, Actually Carrying Out Layoffs: An Exaggerated "Battle Royale"

Author: Nancy, PANews

As the AI war becomes more intense, human anxiety grows.

With effective accelerationism becoming Silicon Valley’s guiding principle, AI demonstrates astonishing evolutionary speed. The surging wave of business innovation has also fueled unemployment fears. Waves of layoffs are happening one after another, from Silicon Valley giants to Chinese tech firms, from traditional finance to crypto markets—AI panic seems to be continuously escalating.

However, this wave of layoffs is more a delayed correction of expansion bubbles, using AI as a pretext.

From Wall Street giants to the crypto world, AI has pressed the downsizing button.

The global tech industry is experiencing an unprecedented “big slimming,” and the name AI has become the “legitimate” reason for this wave of layoffs.

According to the UK financial research firm RationalFX, in the first quarter of 2026 alone, over 45,000 jobs were cut worldwide in the tech sector, with at least 20% attributed to AI. In comparison, the proportion of layoffs due to AI in 2025 was less than 8%. This trend is accelerating, and the total layoffs for the year are expected to surpass 260,000.

Wall Street was the first to hit the “downsizing button.” Amazon, Morgan Stanley, Goldman Sachs, JPMorgan Chase, Citigroup, BlackRock, Meta… Whether financial giants or tech pioneers, they all launched layoffs simultaneously.

China, also an AI powerhouse, has not been spared. Well-known internet giants like Tencent, ByteDance, NetEase, Bilibili, and Baidu are also restructuring their teams.

The crypto sector has also seen an AI-driven wave of layoffs, including projects like Block, Gemini, Crypto.com, and Algorand, which announced scale reductions this year. Notably, Block announced a 40% brutal layoff, citing AI as the reason for changing the meaning of building and operating companies.

Panic is spreading globally. From the apocalyptic narrative of “AI replacing humans” in “The 2028 Global Intelligence Crisis” to AI expert Karpathy’s “AI Career Risk Map” going viral online, this unease is rapidly sweeping the world.

It seems AI is not stopping, and layoffs may continue.

Silicon Valley’s “Accelerationism” victory halts AI anxiety

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

In Silicon Valley, AI mainly divides into two camps:

Effective Accelerationism (e/acc), a rising philosophical movement that strongly advocates technological development, promoting unconditional acceleration of innovation, even aiming to disrupt social structures;

Effective Altruism (EA), which supports developing and applying technologies that maximize positive social impact while minimizing potential harms.

These two forces operate independently and compete in Silicon Valley.

In effective altruism circles, well-known crypto founder Sam Bankman-Fried (SBF) was a prominent supporter and an early investor in the AI giant Anthropic. However, after the FTX crash at the end of 2022, this ideology faced serious skepticism and ridicule.

On the other side, the AI community has a figure named Sam—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 ideological differences. Subsequently, Altman secured funding, burned through cash rapidly, and launched generative AI ChatGPT in 2022. At the time, it was called the fastest-adopted consumer product in history, which also nudged Silicon Valley toward accelerationism.

During this process, OpenAI’s internal conflict between accelerationism and safetyism sparked a global scandal. Ultimately, Altman emerged victorious and returned, marking a significant turning point in AI development.

Since then, effective accelerationism has become increasingly popular, guiding Silicon Valley elites’ actions, with AI beginning full-scale commercialization and large-scale deployment.

Karpathy created a risk score for 342 U.S. occupations using AI. In this visualization, green indicates safe jobs, while red signifies high automation risk. Jobs involving computer use and digital information processing score higher; outdoor manual labor and jobs requiring real-world interaction (like electricians, plumbers) score lower. However, a high score does not mean unemployment—only a higher risk of being replaced by AI.

But according to Nvidia CEO Jensen Huang, AI will not cause unemployment; instead, it will boost productivity and create more jobs. Venture capital firm Andreessen Horowitz believes history repeatedly shows automation does not lead to permanent mass unemployment; AI is more about augmenting humans than replacing them entirely. Morgan Stanley’s latest report states AI will not cause large-scale permanent unemployment but will change employment structures.

Block’s re-hiring case also supports this view: some of the first laid-off employees have been recalled.

Several Block employees reported receiving rehire invitations on LinkedIn, citing reasons like “clerical errors” and shortages of key infrastructure staff. CEO Jack Dorsey previously admitted that layoffs might have been a mistake, and some laid-off employees believe the layoffs were more about boosting investor confidence than purely AI-driven replacements.

Using AI as a pretext for correction

AI is fostering FOMO and is also seen as a source of collective anxiety. However, this wave of layoffs appears more like a “delayed correction.”

Recent research by the Oxford Economics Institute indicates that, although there are cases of jobs being replaced by AI, macroeconomic data does not support the view that automation will trigger structural employment changes. Companies seem not to be extensively using AI to replace workers but rather using it as a shield for routine layoffs.

Compared to admitting to weak consumer demand or previous overhiring, attributing layoffs to AI applications sends a more positive signal to investors.

Laura Ullrich, head of economic research at job platform Indeed, recently stated in an interview that this is related to overhiring or hiring booms in the post-pandemic era. CEOs privately acknowledge that their companies are still “overly large and bloated.”

During the pandemic, major economies entered a large-scale easing phase, with online economies expanding rapidly, creating many “special demand” jobs. Many leading companies doubled or even tripled in size during this period, with generous pay raises and aggressive expansion becoming the norm.

However, as the economy gradually normalizes, job demand declines, and rising interest rates, high borrowing costs, and weak consumption slow economic growth. More tech companies are realizing that the employee overexpansion in recent years has led to redundancies that must be slimmed down.

The crypto market is similar: pandemic-driven liquidity and low interest rates created huge bubbles, but as liquidity tightened, project survival pressure increased sharply. Coupled with ongoing market downturns, layoffs became an inevitable adjustment. Jack Dorsey also admitted that the company overhired during the pandemic when responding to layoffs.

It can be said that today’s large-scale layoffs are not solely triggered by AI but are more a result of economic cycle normalization and market correction. While AI has indeed impacted certain jobs, it acts more as a catalyst than the root cause.