When a technological advancement breaks free from water cooler conversations and “tech bro” circles, you know it’s here to stay. Last year, artificial intelligence was an advancement that did just that.
The last twelve months have been significant for businesses looking to perfect their evolving AI strategies. Some have cut roles here and there, others have gutted entire teams, and a handful have slammed the door in the faces of prospective employees desperate to get their foot in the door of Big Tech. But now, a year on, has this been a good idea?
How AI Strategies Evolved in 2025
By the start of 2025, ChatGPT had been in the world for just over two years, and what an impact artificial intelligence had already made. Generative AI had slowly shifted to agentic; Agentforce was growing as both a product offering and a suite of capabilities, and AI was becoming more and more autonomous.
As I covered at the start of this year, 2025 was the year that businesses not only had to prove that their AI tools worked, but that they were useful to their customers. Of course, businesses and implementers were faced with challenges, including gaps in value realization, confusion over costs, and even an apparent “pilot purgatory”. But it became clear that, if a business wanted an edge against its competitors, a solid AI strategy was the way.
Discussions around navigating the evolving AI market became more pertinent, with talks of saturation, hesitation from investors sending stocks crashing, and whether sticking with just one AI provider was a good idea or not.
On the human side, businesses began considering the implications of trimming or restructuring workforces in the name of AI, and many followed through. AI was heralded as the driving force behind a growing number of tech layoffs, but this story wasn’t as clear-cut as it may have sounded.
The Rise of AI Layoffs
Nearly 125,000 tech employees were laid off across 271 companies in 2025. Although this is a significant number of cut roles, this rate was actually 20% lower than in 2024, despite the fact that October ranked as the worst month for tech layoffs in more than 20 years.
The affected companies included some of the most notable names in tech, including IBM, Amazon, Microsoft, Meta, and Salesforce. Although restructuring was cited as a reason behind many of the layoffs, another reason came up time and time again: AI.
Salesforce faced scrutiny after CEO Marc Benioff announced that the company had begun “rebalancing” its workforce by using AI agents to replace around 4,000 customer support division employees, especially after it was Benioff himself who had previously remained bullish about the impact of AI on jobs.
When Microsoft announced layoffs in July, all signs also pointed to AI, after it became apparent that the company spent tens of billions of dollars on data centers and AI development, with plenty of investors to please, strategy-wise.
In fact, according to consulting firm Challenger, Gray & Christmas, artificial intelligence was responsible for almost 55,000 layoffs in the U.S. in 2025, at least on the surface. Debates on whether or not AI was being used as a scapegoat for mass layoffs (now colloquially known as “AI-washing”) became more prominent as the year went on, and it’s clear that it is not something that will be put to rest any time soon.
Seniority Can’t Save You
Interestingly enough, there was not a particular working group that was most impacted by these layoffs or restructuring. IBM laid off 8,000 employees in May, primarily from its HR division, and it was alleged that a notable number of these were senior.
Earlier this month, when it was revealed that Salesforce had conducted layoffs in 2026, it became apparent that roles of all kinds were let go, with some employees having worked at the company for more than a decade.
On the other hand, although layoffs did not seem to proportionally affect entry-level talent, they have played a part in the fact that entry-level tech roles are down 67% according to the Stanford Digital Economy Lab.
Not only that, but Anthropic’s CEO Dario Amodei recently predicted that 50% of entry-level jobs may be wiped out by AI as the technology improves.
Changing the Hiring/Firing Tune
AI strategies can change, and companies can come to regret past hiring or firing decisions – this is very natural. With some critics actively anticipating this, it can be easy to see why stories of this happening make waves, especially as AI is only just breaking free of its cocoon.
Last week, IBM announced that it was “tripling [its] entry level hiring” after finding the limits of AI adoption. Great news for GenZ.
“Yes, that is for software developers and all these jobs we’re being told AI can do,” Nickle LaMoreaux, IBM’s Chief Human Resources Officer, said recently. “The companies three to five years from now that are going to be the most successful are those companies that doubled down on entry-level hiring in this environment.”
IBM has adapted its job roles across different sectors to prioritize AI fluency, even though many entry-level tasks are now automated. According to LaMoreaux, this strategic shift not only builds more lasting skills for employees but also generates greater long-term value for the company.
For example, software engineers will now dedicate less time to routine coding and more time to customer interaction. Similarly, HR staff will focus more on intervening with AI chatbots rather than answering every query themselves.
Salesforce has also backtracked on its hiring and firing strategy. At the end of last year, The Information reported that Salesforce was quietly pulling back from its extensive use of LLMs after “repeated reliability issues”. Senior executives admitted that confidence in generative AI had taken a hit and that the company was now focusing on predictable automation.
It is unclear whether or not Salesforce plans to ramp up hiring in the face of this, but it will be interesting to see what the decision process will entail, especially after last year’s “redeployment” effort.
What Can the Tech Industry Learn From This?
Whenever I cover how businesses have navigated the changing tech landscape, I think back to what Amazon Web Services (AWS) CEO Matt Garman said about AI replacing entry-level jobs.
“If you have no talent pipeline that you’re building and no junior people that you’re mentoring and bringing up through the company, we often find that that’s where we get some of the best ideas,” he said.
“Just saying ‘OK great, we’re never going to hire junior people anymore,’ that’s just a nonstarter for anyone who’s trying to build a long-term company.”
I must stress that senior and mid-level talent should not be overlooked in this scenario either, as they’re the talent best-positioned to blend new training with old tricks, essentially bringing a fusion strategy that businesses can use to achieve the best of both worlds.
Aside from this, IBM and Salesforce’s steps back should encourage other businesses to really think through what they’ve got planned for AI and beyond. Trimming headcount is sometimes necessary – there is no denying that. However, we have been shown time and time again that AI advancements and capabilities rely on human development and skill to succeed. If you try to rewrite that part of that equation, do not be surprised if it comes back to bite.
Final Thoughts
AI strategies are something that are continuously evolving, especially as AI progresses in terms of advancement. This year will be crucial for businesses to work out what their strategy looks like for them, considering both humans and technology.
I imagine we will see another company follow in the steps of IBM and Salesforce soon, and maybe then a wider reevaluation effort will be on the cards.
