Major Tech Firms Slash Thousands of Jobs in May, Citing AI as Key Factor

AI-Driven Layoffs Sweep Tech Industry in May

April saw significant job losses across the tech sector, with major firms like Microsoft, Meta Platforms, and Snap announcing workforce reductions. May is proving no different, as several companies—including Cloudflare, PayPal, and Coinbase—announce plans to cut thousands of positions, attributing the layoffs to the rise of artificial intelligence.

Cloudflare Cuts 1,100 Jobs, Blames AI Adoption

Cloudflare announced on May 7 that it would lay off more than 1,100 workers globally, representing roughly 20% of its workforce. The announcement came from cofounders Matthew Prince and Michelle Zatlyn in a letter to employees. The primary driver behind the cuts is the company’s accelerated shift toward AI integration.

In the letter, Cloudflare noted that its use of AI across departments—including engineering, marketing, finance, and HR—has "increased by more than 600% in the last three months alone." The company now runs "thousands of AI agent sessions each day" to streamline operations.

Following the announcement and its Q1 earnings report, Cloudflare’s shares (NYSE: NET) dropped by approximately 15%.

Bill.com to Cut 30% of Workforce by 2026, Aims for AI-First Future

On the same day as Cloudflare’s announcement, Bill Holdings (NYSE: BILL), a fintech SaaS provider for SMBs, revealed plans to reduce its workforce by 30%. CEO René Lacerte stated that the company will transition into an "AI native" organization.

Lacerte explained that an AI-first approach accelerates "the time between ideation and execution," necessitating structural changes. The layoffs, affecting around 700 employees, are expected to be completed by the end of Q4 2026.

"This is a considered and deliberate decision that reflects the needs of the business. We are structuring our business to achieve profitability at meaningful levels for a company of our scale and tenure; while also positioning our business to operate more effectively and efficiently in an AI-first world."

Upwork Slashes 25% of Workforce, Cites AI Efficiency Gains

Freelancing platform Upwork Inc (Nasdaq: UPWK) also announced job cuts on May 9, with CEO Hayden Brown stating that approximately 25% of its workforce would be affected. The company, which employs around 600 people, will begin notifying affected employees next week.

Brown attributed the layoffs to AI’s growing role in operations, stating, "Two pizza teams are dead. AI means smaller, differently resourced teams in product and engineering can make a bigger impact than ever."

Key Takeaways

• Cloudflare: 1,100 jobs cut (20% of workforce), AI adoption cited as primary driver.
• Bill.com: 30% workforce reduction (700 jobs) by Q4 2026, transition to AI-native operations.
• Upwork: 25% workforce reduction (150 jobs), AI efficiency gains highlighted.