A powerful wave of layoffs is rolling through the heart of corporate America. From Big Tech to banks to blue-chip brands, many of the country’s largest employers are cutting back on staff, and they are doing it in ways that suggest something much bigger is happening than just temporary cost-cutting. This is not just about economic uncertainty. It’s a reshaping of how companies view their workforce—and what they think they need to grow.
According to Live Data Technologies, U.S. public companies have collectively trimmed white-collar workforces by 3.5% over the last three years. Roughly 20% of companies in the S&P 500 now have fewer employees than they did a decade ago. And many of those companies have posted higher sales and profits over that same period.
Amazon CEO Andy Jassy made this shift clear in a message to employees: “The once-in-a-lifetime rise of AI will eliminate the need for certain jobs in the next few years.” In an earlier letter to shareholders, Jassy wrote that the best leaders are those who “get the most done with the least number of resources required to do the job.”
Which Companies Are Laying Off—and Why
The list of companies making cuts is long and crosses almost every industry:
- Amazon is reducing its workforce in multiple divisions, including Prime Video and its AWS cloud services group.
- Procter & Gamble is eliminating 7,000 jobs, about 15% of its non-manufacturing staff, to create “broader roles and smaller teams.”
- Bank of America has reduced its employee count from 285,000 to 213,000 since 2010. “We have a higher-producing company with fewer people and lower costs,” said CEO Brian Moynihan in an April investor call.
- Meta has laid off more than 20,000 employees since 2022 and is now restructuring teams across Instagram, WhatsApp, and its Reality Labs division.
- Boeing is cutting 10% of its global workforce, including engineers and analysts in Washington and Oregon. CEO Kelly Ortberg said Boeing was in a “difficult position” and that “restoring our company requires tough decisions.”
- Cargill, the largest privately owned U.S. company, is cutting 5% of its workforce globally to “realign talent and resources to align with our strategy.”
- Chegg is slashing 21% of its workforce due to intense competition from AI tools like ChatGPT. CEO Nathan Schultz said, “Google’s AI rollout and student adoption of generative AI products have negatively impacted our business.”
Other notable cuts include:
- Microsoft, trimming 6,000 jobs, or 3% of its workforce.
- Walmart, eliminating hundreds of positions across its tech, fulfillment, and eCommerce divisions.
- Tesla, which has already laid off over 10% of its employees.
- IBM, reducing roles in marketing and communications and warning that up to 30% of certain positions could be replaced by automation over the next five years.
AI and Automation Are Driving the Shift
The rise of generative AI is transforming how companies approach staffing. Executives at Shopify and Duolingo have both told employees that new hires will only happen if the work cannot be automated.
When HR software maker Lattice considered building a payroll product, leadership initially believed they’d need 40 to 50 new employees. Instead, they hired fewer than 10. CEO Sarah Franklin explained that today’s AI tools “can take bespoke requests, bespoke querying and match them to give you an answer. That’s what we as humans do.”
Walmart is already using AI-powered agents to shorten apparel development timelines by up to 18 weeks. These technologies are replacing work that would otherwise require full-time staff.
At Grindr, CEO George Arison said revenue per employee more than doubled since 2022. “I was pretty clear that people are not working as much as they need to,” he said. The company boosted productivity without major increases in headcount.
The Flattening of the Workforce
A growing number of companies believe that having too many employees slows down decision-making and hurts efficiency. Hewlett Packard Enterprise’s CFO Marie Myers told investors, “Flatter is faster,” as she discussed HPE’s reduction to fewer than 59,000 employees—the company’s lowest headcount since becoming independent.
The average number of direct reports per manager rose from 4.2 in 2020 to 5.1 in 2023, according to HR platform Lattice. That means managers are overseeing larger teams, often with fewer resources.
Joseph Fuller, a professor at Harvard Business School, warned that companies are now “delayered to the point of making the companies anorexic.” He added, “Employees are endlessly distracted and doing the work that three people did 10 years ago.”
Critics worry that this trend could backfire. Although companies are saving money now, they may be burning out employees and creating barriers to innovation.
Mischa Fisher, an economist at Udemy, described the mood as frozen: “Employees are too nervous to make moves. Early career workers can’t break in, experienced workers can’t move up, and burned-out employees stay put.”
Some labor economists argue that long-term productivity could suffer if too much institutional knowledge is lost. Others fear that outsourcing too much to AI may make companies less creative, less human, and more vulnerable to technical failure.
Many executives and investors see this moment as a long-overdue correction. The pandemic years led to overhiring, and AI is now making it possible to do more with fewer people.
At Jolie, a showerhead startup with just five employees, CEO Ryan Babenzien expects to hit $50 million in revenue this year. “Hiring is not necessary like it used to be,” he said. “Ten years ago, it would be really difficult to build a $50 million business with five or less people. Today, I think it’s going to be really, really common.”
Moderna CEO Stéphane Bancel recently challenged his team to launch 10 new products without adding headcount. “The challenge I have for our team is: How do we launch those 10 products without adding head count?”
Executives are also focusing more on revenue-per-employee. Amazon’s Jassy said that AI agents “will allow us to start almost everything from a more advanced starting point,” speeding up innovation and reducing staffing needs.
A Shift That’s Here to Stay?
This year’s layoffs are different from past job cuts. They’re not just happening in response to recessions or earnings slumps. Many are happening even as companies are posting record profits. U.S. corporate earnings reached all-time highs at the end of 2024, according to the Federal Reserve Bank of St. Louis.
According to PYMNTS, 92% of CFOs in the goods and retail sectors reported growing uncertainty and challenges due to tariffs and policy changes. More than 70% said they were reducing operational costs, including payroll, while half were raising prices.
In other words, companies are looking to become more agile and less dependent on large full-time staffs, even in strong markets.
This transformation is being driven by automation, by competition, and by a belief that leaner companies move faster and adapt more easily. Whether this approach will create long-term gains or long-term damage is a question that has not yet been answered.
