When Duolingo announced in April its transition to an "AI-first model" and cut some contractors, it seemed like an isolated case. Now there are 363 such cases in less than five months. According to TrueUp, a platform tracking layoffs in the tech sector, since the beginning of 2026, the industry has shed almost 150,000 workers.
The common denominator in most announcements is artificial intelligence. Companies explain the cuts through automation of processes, a "transition to a new operating model," or a "restructuring under AI strategy." The wording varies, but the essence is the same.
Where the logic doesn't add up
The problem is that quarterly reports from those same companies show record or near-record revenues and net profits. Microsoft, Alphabet, and Meta all reported growth in the first quarter of 2026. If AI truly replaces people and reduces costs, this effect should be reflected in margins — and it is. But at the same time, these companies are increasing capital expenditures on infrastructure for that same AI, meaning money doesn't disappear — it's being redistributed from salaries to servers and energy.
This means that "AI eliminates people" is only part of the truth. The full version is more complex: companies are using the technological transition as a politically acceptable cover for optimization that investors would have expected anyway, with or without ChatGPT.
Who's hit hardest
By the structure of layoffs, middle positions suffer the most: data analysts, content managers, testers, junior developers, and support services. These roles are the easiest to automate first and the hardest to defend with unions — they're almost absent in the American tech sector.
150,000 is not an abstraction. For comparison: this is more than the entire population of Uzhhorod, or roughly half of all employed in Ukraine's entire IT industry by pre-war statistics. People who lost their jobs mostly have narrowly specialized experience and find themselves on the job market simultaneously with thousands of colleagues with the same resume.
What this means beyond Silicon Valley
Ukrainian IT specialists working for American and European tech companies as contractors or through relocation are already feeling this wave. Several recruiting agencies specializing in placing Ukrainian developers abroad are recording an increase in candidates against a backdrop of reduced open positions — especially in the mid-level segment.
The real conflict here is not between people and technology. It's between the narrative companies sell to the public and regulators, and the decisions actually made by boards of directors. As long as layoffs are explained by AI rather than "we want higher margins," the public and regulatory response remains muted.
The question is not whether AI replaces people — it does, and that's a normal part of the technological cycle. The question is whether this dynamic will change if regulators in the EU or Congress in the US demand that companies disclose what proportion of cuts are truly linked to automation and what proportion is ordinary cost optimization under shareholder pressure.
