Tech Layoffs are on the rise. People are training their very replacements.
“They’ve been screen recording every senior engineer’s coding sessions since October. Building training data for the offshore team.”
“All the L5s and L6s who’ve been building the knowledge extraction systems. 1,200 engineers who documented their own workflows into training datasets”
“One L7 told me he spent his final two weeks creating detailed prompt libraries and workflow documentation. Thought he was being helpful for the transition. Turns out he was literally training the AI agent that replaced his entire org. The contractors offshore are using his exact prompts …”
Then the C-Suite off-shore it to Pakistan. (What happened to Made in the USA?)
We will wake up in Q3 and realize our economy is cratered. No matter what Layoff Tracker you use, the tech industry has lost 50K jobs in 2026. No new jobs are available because of AI right-sizing.
Profits are at an all-time high and rising, so the layoffs appear to be just to squeeze more juice from the lemon.
The thing I cannot wrap my head around: our economy is 66% of GDP. If layoffs are increasing and no (real) new hiring is occurring, what do you think happens to that 66%?
Entry-level jobs are in decline so college grads are not finding jobs either. People are unemployed longer than six months.
The employees who are remain post-layoff are told: if you can’t 10x productivity with Claude and Cursor, you’re already dead. They will burn out employees in no time, then fire them. Am I missing something?
Meanwhile, these 2 examples of AI burning companies: (1) at Amazon: “Amazon’s own AI coding agent Kiro reportedly “decided” the fastest way to fix a config error was to delete the entire production environment. Gone. A 6-hour outage. 6.3 million orders lost.” and (2) at McKinsey: “Red-teamers used AI to gain full access to McKinsey’s chatbot in two hours. CodeWall accessed 46.5 million plaintext chat messages about strategy, mergers and acquisitions, and client engagements. The agent also obtained 728,000 confidential client data files, 57,000 user accounts, and 95 system prompts controlling the AI’s behavior.”
I am not entirely convinced that every document, file, prompt, data set entered into an LLM is walled off in the pay window. I believe it is all fed back into the Sentience and available for the right prompt. Think how many times Meta, Google, Amazon, et al ever stepped over the privacy line? Every. Single. Time.
There there are the surveys and studies about how enterprises are fed up with AI since the hype outpaces the reality. That may be due to (1) lack of available data due to silos and proprietary software; (2) lack of employee training on AI; and (3) employee fear of AI. But if the hype isn’t real, why are all these layoffs happening?
And again where does this go?
We will have another generation of college grads with huge loans and no way to pay them off.
When you consider how much advertising gambling does – and the Robinhood app is an addictive gambling app as well – maybe the whole point is to keep the populace broke. Can’t afford bullets if you are broke right?
But then how does the economy run?
When Amazon is laying off between 16,000 and 40,000. Oracle is laying off 20-30K. These employees had email, SMS, DID, tools, SaaS – so now the SaaS providers and the CSPs have to turn down at least 36K seats, at multiple providers. That will affect SF, Zendesk, Wiz, Microsoft, Atlassian. These companies are also announcing layoffs. And around and around we go. But the revenue will decline for all SaaS and monthly recurring revenue.
And if we are just using Lovable and REPLIT, why does anyone need to pay for CRM or any portal? That is outer edge thinking there.
Many developers are not going to be able to transition into AI operators. It is a different skill set. So what do they do?
I just don’t see a great short-term future here. What am I missing?
