"Mass layoffs" sweep Silicon Valley—company willingness "grows stronger," employee reemployment "grows harder."

Snap cuts 16% of its employees, Block slashes 40% of its workforce, Oracle makes large-scale job reductions—Silicon Valley is entering a “mass layoff” era. Since the rise of AI, Silicon Valley companies no longer reduce staff in gradual, moderate ways. Increasingly, they opt for one-off downsizing, laying off large numbers of employees at once, which has earned them enthusiastic investor support. Analysis suggests that layoffs are no longer seen as a signal of trouble or mismanagement, but rather as a mark of “decisive action” by leadership. Venture capitalists point out that most companies cutting 30% to 50% of their workforce will not substantially impact their performance. Furthermore, American companies’ willingness to lay off significant numbers reflects a fundamental shift in how they view professional talent. Over the past decade, many firms offered high salaries and benefits to attract knowledge workers. Now, leaders believe large teams hinder growth. Block’s CFO and COO Amrita Ahuja revealed that after the company announced a 40% workforce reduction, many executives proactively reached out to Block, seeking to replicate this “mass layoff playbook.” She stated bluntly that this approach is “inevitable,” saying: > As a CFO, I’d rather act early than fall behind. Meanwhile, the situation faced by laid-off employees is becoming more severe, and the difficulty for white-collar workers to find new jobs is rising significantly. Analysis from the U.S. Department of Labor shows that over the past 12 months, the unemployment rate for college graduates under 34 has equaled, and even surpassed, the 4.1% rate for those with associate degrees. **Layoffs traded for stock price, companies scramble to imitate** Large-scale layoffs are becoming a new tool for Silicon Valley companies to gain favor in the capital markets. On Wednesday, April 15, local time, Snap announced 1,000 layoffs. Its stock rose 8% that day, though it had dropped 23% over the past year. (Stock price rose 7.86 after Wednesday’s layoff news, maintained high volatility Thursday) Block, whose share price had fallen 16% this year, announced at the end of February it would cut around 4,000 employees (about 40% of its total workforce). Afterward, the stock not only recovered, but climbed higher. Amazon also cut about 30,000 jobs within several months. This phenomenon reflects a profound change in market sentiment. Veteran HR executive Beth Steinberg stated: > More companies will follow suit. A few companies acted first and received praise, which will drive other management teams to go back to their own companies and say, ‘We must also conduct mass layoffs.’ **“Streamlining” logic—not just AI** Although artificial intelligence is frequently cited as a reason for layoffs, several executives pointed out the real drivers behind current large-scale layoffs are the high costs of building AI technology and correcting over-hiring during the pandemic, rather than AI actually replacing many jobs. Mo Koyfman, founder of Shine Capital and former executive at IAC, believes: > Most companies can lay off 30% to 50% of employees at any time without materially impacting performance. He added: > AI certainly increases some work efficiency, but more importantly, it provides “air cover” for management to carry out personnel optimization that should have been done long ago. Tariq Shaukat, CEO of code validation company Sonar, holds a reserved view. He says that AI tools indeed compress certain tasks into a few hours, but workers still spend considerable time correcting AI errors and data misinterpretations. Tariq Shaukat said: > I understand why companies would delay hiring, but I find it hard to believe AI is truly the reason for 40% of layoffs. **Tech talent, job searching is increasingly difficult** The workforce released by mass layoffs has not been smoothly absorbed by the market, and anxiety among white-collar workers is spreading. Former IBM Distinguished Engineer Michael Maximilien left last year and founded the AI management tools company ClawMax. He said he receives job inquiries from tech professionals, including employees from large companies, almost daily, but he currently has no hiring plans. He predicts that if coding tools like Anthropic’s Claude Code and OpenAI’s Codex continue to evolve rapidly, **by the end of 2026, many tech companies will cut their team sizes by 20% to 50%.** Michael Maximilien said: > In 30 years, I’ve seen only two people do better than Claude Code. The models keep improving, so why would I hire someone instead of just buying more Claude accounts? Meanwhile, economist Dana M. Peterson points out **the wave of layoffs has spread to warehousing, logistics, and other sectors that heavily hired during the pandemic. Outside of medicine and a few others, hiring in most economic sectors has nearly stopped.** She said: > Elsewhere, no one is hiring, and no one is firing. **Political risk emerges, “large layoff era” may be just beginning** As the scale of layoffs continues to grow, their potential political impact is beginning to surface. If this trend continues, mass unemployment may become a major political issue ahead of the midterm elections. At present, industry figures like Koyfman remain optimistic about the necessity of layoffs, believing that streamlining bloated teams aids long-term efficiency. But for tens of thousands of workers who have been laid off, reality is much less optimistic. Economist Gad Levanon points out that a bachelor’s degree used to be a “moat” in the labor market, but now this barrier is disappearing. Gad Levanon said: > The premium for job security brought by a bachelor’s degree has at least temporarily disappeared. Regardless of whether the motivation behind layoffs is AI-driven, cost-cutting, or capital market rewards and penalties, one thing is certain: **Companies’ willingness to wield the “big axe” is growing, and employees are finding it increasingly difficult to secure their next job.** Risk disclaimer The market is risky, investment requires caution. This article does not constitute personal investment advice, nor does it take into account the particular investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this article is at your own risk.