Three software companies announced layoffs of up to 30% of their workforce. Is AI taking away jobs?

On Thursday, Ma. 7, three technology companies announced large-scale staff cuts, directly linking them to the introduction of artificial intelligence, MarketWatch noted. The market reacted ambiguously: shares of some companies fell sharply, while in other cases investors positively perceived the business bet on AI and cost cutting.

- Freelancing platform Upwork has announced that it is laying off about a quarter of its employees. CEO Hayden Brown said in a letter to employees that AI allows "small teams to make a bigger impact than ever before." The company is cutting duplicate functions and simplifying workflows, she said.

- Cybersecurity solutions provider Cloudflare has announced the layoff of more than 1,100 employees - about 20% of its workforce. Founders Matthew Prince and Michelle Zatlin said that the use of AI within the company has grown by more than 600% in the past three months, with employees conducting thousands of sessions daily with AI agents to complete work tasks.

- Financial software developer BILL Holdings said in a filing with the U.S. Securities and Exchange Commission (SEC) that it plans to cut up to 30% of its staff. CEO Rene Lassert said the company is "aggressively" restructuring the business. According to him, the company's clients will receive not just software, but "a team of AI agents" capable of automatically managing the internal financial processes of the business.

"We are actively moving our company toward full adoption of artificial intelligence and are rapidly changing the way we do business," Lassert said after the reports were published.

Shares of Upwork at the auction on May 8, declined at the moment by almost 30%, and ended the day in the minus by 17%. Cloudflare securities at the low for the day were cheaper by 25%, and quotes of BILL Holdings, on the contrary, rose by 15%, and by the close of the exchange slowed to 11%.

The software sector is under pressure not only from a wave of layoffs, but also from a broader fear that AI could change the business model itself. In February 2026, for example, investors staged a sell-off in the sector after AI startup Anthropic introduced plug-ins to automate business tasks. That then pulled the broad market down as well.

On April 23, Meta announced that it would cut 10% of its employees amid its expanding investment in artificial intelligence. And on May 5, cryptocurrency exchange Coinbase said it would cut 14% of its employees (that's 700 people) as part of the transition to a new model of working with AI.

Technology companies continue to lead the way in the number of layoff announcements, noted labor market expert and Challenger, Gray & Christmas Chief Revenue Officer Andy Challenger. His opinion is cited by MarketWatch. Even if specific jobs are not yet being fully replaced by AI, "the money for those positions is already going out," he said.

According to Challenger, artificial intelligence was responsible for about 16% of all announced job cuts from the beginning of the year through April, compared to 13% a month earlier. AI now ranks third among the factors leading to layoffs.

This article was AI-translated and verified by a human editor