Layoffs at tech companies are continuing at a blistering pace this year as the industry navigates emerging artificial intelligence trends and the ballooning costs associated with them.

The tech sector, which includes Seattle's Amazon and Redmond's Microsoft as well as thousands of smaller firms, announced more than 18,700 job cuts in March for a total of 52,050 this year, according to a recent report from outplacement firm Challenger, Gray & Christmas.

That's most for the first three months of a year since 2023, according to the report. After the financial markets soured on tech companies in 2022, following a pandemic-induced boom, tech companies like Amazon and Microsoft announced sweeping layoffs in 2023.

Those tallies don't include Meta layoffs week and Oracle layoffs disclosed in late March, which have affected hundreds of employees in the Seattle area.

Artificial intelligence, the technology powering valuations growth for many tech companies, was the leading cause of workforce reductions across the economy, according to the report. About a quarter of all job cuts tracked across multiple industries were blamed on AI.

That may feed fears that rising automation is displacing workers in industries like health care, media, finance and even tech, although experts are skeptical that the masses of laid-off workers are being replaced by robots.

Caroline Walsh, a managing vice president in research firm Gartner's human resources practice, said she isn't seeing AI-related productivity boosts driving mass layoffs.

These layoffs may be more related to AI costs," Walsh said. "We're not seeing large companies lay off people just because of productivity gains."

Walsh was referring to the massive increase in spending by some of the tech industry's titans.

Companies like Microsoft, Amazon, Meta and Oracle — all of which have laid off thousands of workers over the past year — are reporting unprecedented capital expenditure figures each quarter. Capital expenditures are investments the company makes separate from the daily costs of doing business. Most of the billions of dollars tech companies have recently spent on capital expenditures has been toward data centers and computer chips to support new AI models.

"Companies that are betting on generative and agentic AI are looking to find transfusions of cash to keep up with the costs," Walsh said. Cutting "human capital is a quick answer, but it's not always the long-term answer."

After spending record amounts on capital expenditures in 2025, tech companies aren't showing signs of slowing down in 2026.

Meta anticipates it will spend between $115 billion and $135 billion this year. After spending more than $88 billion in its 2025 fiscal year, which ended in June, Microsoft spent an additional $72.4 billion in the first half of its 2026 fiscal year.

Each quarter, tech leaders justify the rising investments to Wall Street analysts, saying demand for AI models and products is rising, especially from large companies.

But Wall Street is looking for returns on investment and efficient growth, and finding too little of either.

"Wall Street is getting impatient with the tech giants," said Jean Atelsek, a senior research analyst for S&P Global Market Intelligence. "There's not enough income flowing to the folks that are spending. Everyone was full-speed ahead a year ago, but patience is wearing thin."

Oracle's stock price is down 25% on the year, Microsoft's is down 21%, Meta's is down 11% and Amazon's is down 7%. All of those companies are spending billions on AI infrastructure each quarter, and all have had mass layoffs over the past year.

Aside from controlling costs amid an AI spending boom, some tech companies are telling employees they're restructuring the corporate ranks by flattening layers and trimming teams that overhired during the pandemic.

Walsh, the managing vice president at Gartner, said those quick cost-cutting efforts like workforce reductions are often shortsighted.

"We're seeing people cut who then come back as contractors because the work still needs to be done," she said.

A report from Gartner in October found that cost-cutting efforts at large companies are usually neutralized in a few years, as staff are rehired or retrained and demand higher salaries.

"Although 65% of organizations have engaged in multiple rounds of cost cutting in recent years, only 11% of organizations managed to sustain their cost reductions into a third year," the report said.

The need for talent battling the need for savings creates some slight optimism in a labor market that can feel bleak.

Sara Eide, a Pacific Northwest regional director with recruiting firm Robert Half, said there is an ongoing reset in the tech industry but companies aren't shying away from hiring.

"Many employers are hiring but they are more selective," Eide said. "Recent research from us showed that 60% of employers were planning to add permanent staff this year. They still have critical roles they need filled."

Eide's advice for job seekers in a crowded talent pool who are battling open jobs is to upskill. Machine-learning engineers, data analysts and data scientists are among the tech roles that need filling.

"Those with in-demand skills are finding opportunities," Eide said. "The layoff headlines are scary and we keep hearing there's a collapse in demand, but there's not yet.

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