What started in fintech is now spilling over into software, cryptocurrencies, and banking — and accelerating
AI layoffs are accelerating, and they are spreading across the economy.
Financial technology. Enterprise programs. encryption. Now traditional banking.
Different industries, same message: fewer people are needed to do the same work.
Not long ago, We’ve detailed Jack Dorsey’s 40% headcount reduction in roadblock (XYZ) and argued that it would be considered a crossing of the Rubicon — the moment when AI moves from a talking point about productivity to a pink slippery slope.
Assuming this trend continues, we modeled a likely range of 8% to 13% structural unemployment in the US economy, on par with the worst recessions of the past 100 years.
We warned that the chain would start in fintech and spread outward from there, eventually sweeping across the entire knowledge economy.
Well, it’s been about three weeks since then.
Unfortunately, the pace is accelerating faster than we expected.
AI Layoffs Scorecard: What Just Happened
Let’s take a look at what’s happened since the last time we discussed AI layoffs because the landscape is changing rapidly.
On March 11, Atlantic (a team) – The Australian enterprise software giant behind Jira and Confluence – has announced that it will lay off 1,600 employees, with more than 900 of the layoffs aimed directly at software research and development. CEO Mike Cannon-Brooks wasn’t quite as direct as Jack Dorsey in his approach, but he came close:
“It would be disingenuous to pretend that AI doesn’t change the mix of skills we need or the number of roles required in certain fields. It does.”
The market rewarded the move, with the company’s stock rising 1% following the announcement.
Now, it’s not like Atlassian is a struggling startup. Cloud revenue growth has accelerated to over 25%, RPO growth is over 40%, and the company has over 600 customers spending over $1 million annually.
This is a company that is already healthy and is choosing to be leaner.
Healthy companies cut back anyway
The Atlantic is not an isolated case. Many companies that make these cuts are not under pressure, but are choosing to work differently.
Snowflake (snow) It laid off the entire writing and technical documentation department.
This news comes on the heels of the announcement of a $200 million partnership with… OpenAIwhich included an autonomous agent platform capable of drafting complex API documentation directly from source code in minutes – work that previously required human teams weeks to complete. The department was not only downsized, but also replaced, with the same product supplied by the company.
If you wanted a clearer explanation of the mechanism, you couldn’t invent one.
This pattern continues to spread.
Copying the template
The Winklevoss twins’ cryptocurrency exchange started the year with nearly 700 employees — and spent two months systematically getting rid of 30% of them. We are likely to remember this line from the shareholder letter:
“The AI is now too powerful to be used in Gemini. Not using AI in Gemini will soon be like showing up to work with a typewriter instead of a laptop.”
The next lawsuit, crypto.comCEO Kris Marszalek posted on X: “We’re joining the list of companies integrating AI at the enterprise level. Companies that don’t make this pivot immediately will fail.”
Unlike most corporate rhetoric, this one has real implications.
Now, this is the headline that stopped the financial world in its tracks. Reuters reported, citing three sources familiar with the matter dead (dead) Planning a comprehensive layoff that could affect 20% or more of the company. Meta employs approximately 79,000 people. Twenty percent is approximately 15,700 jobs.
A Meta spokesman described them as “speculative reports on theoretical methods.” Wall Street called it a reason to buy. Meta stock rose nearly 3% following the report.
The company that is allegedly about to lay off 15,000 people has seen its market value soar. The mechanism runs in real time. Dorsey set the template. Every CEO in America watched what happened to Block’s stock, and they come to the same conclusion.
Last January, Zuckerberg himself said he was starting to see “projects that used to require large teams now being done by one very talented person.” This is not a man who is going to defend 79,000 people for long.
From technology to finance: the spread begins
What started in technology is now moving into more traditional sectors, as we expected.
Financial services company HSBC Holdings (HSBC) is considering significant job cuts in the coming years. CEO George Al-Hadiri is looking to artificial intelligence to shrink the company’s middle and back offices — one of the first signs of how technology is reshaping Wall Street’s workforce. The potential cuts could affect about 20,000 jobs, or roughly 10% of the bank’s global headcount, over the next three to five years, targeting non-customer-facing positions in global service centers.
Twenty thousand bankers. compliance. Operations. Data processing. The unattractive but enormous layer of human labor that keeps the global financial system going is becoming increasingly automated.
and Goldman Sachs (A) and City (C) are considering similar moves. Goldman CEO David Solomon talked about an AI-based operating system called “OneGS 3.0” and tightened performance standards specifically in light of AI capabilities. Insiders say the cuts could be announced as soon as April.
Streaming balance
These numbers are still small compared to the knowledge economy of 50 million people that we modeled.
The exodus has only just begun. But the pace of advertising is accelerating, and the gap between “announcement” and “implementation” is shrinking.
How is the wave of AI layoffs spreading across industries?
The series of AI-driven layoffs that we charted just weeks ago is unfolding largely along the lines we’ve outlined:
- roadblock – Healthy fintech business, explicit AI rationale, and 40% discount. Stock is up 24%.
- Gemini, Crypto.com and related fintech – Direct competitors and neighboring fintech companies followed.
- atlantic/snowflake — Follows the organization’s program.
- HSBC — Traditional finance is now entering the fray; Goldman and Citi are reportedly next.
- Meta/Amazon — The massive platform stage is underway. Amazon already cut 16,000 in January. Meta is next. Alphabet and Amazon are likely to follow suit.
We are similar 8- to 13% of total structural unemployment As a scope for the full knowledge economy adoption of cluster-style AI efficiency. We’re still in the very early innings. What we’re seeing now is the creation of a permissions structure, template versions, and social licensing of pieces that expands with each ad.
The main difference here is Structural, not cyclical.
Each of these ads is a company explicitly saying they have no intention of rehiring for these roles. The entire documentation team at Snowflake has been replaced by software, and has not been furloughed. Atlassian is “reshaping its skill mix” — executive language for: These job categories aren’t coming back. HSBC’s plan spans three to five years and aims to systematically automate operations, not isolate headcount during a bad quarter.
These workers are structurally displaced.
“AI washing” vs. real AI layoffs: Why it doesn’t change the outcome
The counterargument – a real argument that deserves to be taken seriously – is “AI washing.”
Skeptics argue that companies are using AI as a narrative cover for cuts they would have made anyway: over-hiring during the coronavirus crisis, a reality check on post-zero interest rates, and pressure from activist investors and public markets. And last month, Sam Altman himself said that some companies “blame AI for cutting jobs they would have done anyway.”
He’s right. Some of them. Algorand cutting 25% when its token is down 98% has more to do with the crypto cycle than with Cloud. These things are not mutually exclusive, and it’s really hard to separate true AI displacement from cost-cutting due to the coronavirus hangover.
But here’s the thing: Even if 50% of these announced cuts are AI whitewashing—that is, a purely financial justification that uses AI as a public relations cover—the other 50% is real. Snowflake did not maintain its own documentation team and told investors that it uses artificial intelligence. He wiped out the team because the AI could do the work instead.
More importantly: The AI-washing critique assumes that even “false” reductions in AI will eventually not become real. Companies that eliminate documentation teams to save money today, and then find that their AI-generated documentation works adequately, don’t hire those teams again when their inventory recovers. Justification becomes reality.
The AI-washing argument might explain timing Of some cuts, but he does not argue against direction of structural transformation.
What do AI layoffs mean for the economy?
We painted this picture three weeks ago, and nothing has changed. The latest data reinforces the underlying dynamic.
GDP is growing. Markets are rising. The CEO of ServiceNow expects unemployment to reach 35% among recent college graduates. All three are likely to be true simultaneously. The dual economy is aggregated in real time.
The role of AI infrastructure—super-manufacturers, semiconductor manufacturers, and builders of the power and data centers that power the entire machine—are the direct beneficiaries of these shifts.
Every time Block cuts 4,000 people and buys more AI tools, it’s algorithmic spending. HSBC’s replacement of 20,000 middle office staff with AI represents further spending on cloud API, inference and core modeling. Labor savings do not disappear, but are redirected to capital spending on AI, which flows into the profits of companies that build the infrastructure.
What we are seeing is not just a shift in employment, but a redistribution.
From wages to accounts. From the number of employees to the systems. From people to platforms.
As this shift occurs, the center of gravity moves with it.
This is where the next phase of this story begins – and where platforms like OpenAI exist.
Although OpenAI is not yet publicly traded, expectations are building for what could eventually become one of the most important technology IPOs of the cycle.
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