AI layoff wave is becoming a powder keg

Something strange is happening in technology right now. With AI as their official explanation, companies are laying off tens of thousands of people while posting record profits and sales. There have been about 363 layoffs at tech companies so far this year, affecting about 150,000 people, according to TrueUp, a tech job board and recruiting platform that runs one of the most widely cited tech layoff trackers. This is approximately 974 people per day, or 44% faster than last year.

Tech layoffs hit a two-year high, with about 40,000 laid off last month, and AI was the most cited reason for layoffs across all industries for the third month in a row, according to outplacement firm Challenger, Gray & Christmas.

But there is growing skepticism that AI is actually the culprit. It’s more of a convenient cover story than the actual cause. Few examples better illustrate pushback than what happened with Block earlier this year. Jack Dorsey, who fired nearly half of Block earlier this year after struggling over AI, denied that the cuts were a sign of trouble at the payments company and insisted that AI tools were “enabling new ways of working that fundamentally change what it means to found and run a company.” He also acknowledged that Block had in fact been overhiring when commentators on X pressed him about the inflation he had created during the pandemic.

Other voices are starting to weigh in, including prominent VC Marc Andreessen, who recently called AI a “one-size-fits-all excuse” for layoffs for pandemic-era overemployment. In a conversation with podcaster and investor Harry Stebbings, Andreessen said, “Basically every large company is overstaffed. At least 25% overstaffed. Most large companies seem to be overstaffed. Most large companies seem to be about 50% overstaffed. A lot of companies seem to be about 75% overstaffed. Now they all have a silver bullet: Ah, AI.”

What happened with Uber earlier this month illustrates this ambiguity. The company said it was cutting about 23% of its people department (HR and recruiting), affecting less than 1% of its 34,000 employees. A company spokesperson clarified that the cuts had nothing to do with AI. But the announcement comes about a month after Uber’s CTO said the company exhausted its entire 2026 AI coding budget in four months and suggested it should limit individual engineers’ spending on tools like Cursor and Claude Code. Whatever Uber says publicly, it’s hard not to connect the dots.

What makes this combustible: At the very moment tens of thousands of workers are walking through the doors, a small group of AI insiders are getting rich on a scale that is difficult to understand.

Early last month, AI chipmaker Cerebras Systems closed its first day on the Nasdaq up 68% from its IPO price of $185, giving the chipmaker a market capitalization of about $67 billion. This is the largest U.S. tech IPO since Snowflake’s 2020 debut. Eventually, co-founders Andrew Feldman and Sean Lie became billionaires. (The company’s stock price has since fallen 30%.)

Meanwhile, SpaceX, which went public on Friday and enjoys a market capitalization of $2.1 trillion as of this writing, could make Musk a paper trillionaire and potentially create about 4,400 millionaires, assuming its stock price holds up, creating about 400 millionaires in the process. Anthropic and OpenAI are also rapidly entering the public markets, with valuations estimated at over $1 trillion.

Against this backdrop, Mark Zuckerberg’s recent purchases take on new meaning. In early March, he set a record for the most expensive home sale in Miami-Dade County history by purchasing a $170 million mansion in Miami’s “Billionaire Bunker.” Two months later, Mehta announced it would lay off 8,000 people, about 10% of its workforce.

It’s not just Zuckerberg and other tech moguls who routinely pour huge sums into their real estate portfolios. But these extreme circumstances come at a moment when many Americans are under more pressure than ever.

Workers with employer-sponsored health insurance will see their premiums increase by about 6 to 7 percent this year. That’s more than double the rate of inflation, the cost of private health insurance has roughly doubled since 2008, median home prices have risen 28% since the start of 2020 and mortgage rates have nearly doubled.

A January 2026 New York Times/Siena poll found that 65% of voters said a middle-class lifestyle is not possible, and a May 2026 CNN/SSRS poll found that 76% of Americans now cite the cost of living as their biggest economic concern. This is a significant increase from 58% the previous year.

Taken together, this is not just a story about isolated job losses. At the same time that tens of thousands of laid-off tech workers are facing an unusually harsh cost environment, tens of thousands of AI insiders are seeing once-in-a-generation paper assets come to fruition.

It’s not hard to find precedents for what happens when the gap gets large enough. The financial crisis that began in 2008 with Wall Street’s loose lending and excessive risk-taking ended with bailouts of the banks that created it, and the ensuing Great Recession left millions of Americans without jobs and homes. Three years later, that anger crystallized into Occupy Wall Street.

It may seem strange in comparison. Occupy Wall Street grew out of a crisis. The bank needed rescue, and at the heart of the public outrage was who was paying for the clean-up. This time there are no conflicts to point out. Companies are profitable, AI itself is creating new kinds of overnight wealth, and layoffs are occurring for AI reasons. If the view in 2008 was “We’re bailing out the people who ruined the economy while you were out of work,” the view here might end up being “We’re getting richer than ever because of the very technology we’re using to replace you.”

This strategy is understandable, as technology companies have seen their stock prices soar when AI is mentioned, as we’ve seen with Block, Atlassian, Cloudflare, and others. Still, they might want to consider whether that’s actually the message they want to send to the people who are being laid off and everyone else who’s watching right now.