Bottom line: The first quarter of 2026 has already delivered one of the most turbulent job cycles the global tech industry has faced in recent years. Nearly 80,000 people have been laid off worldwide between January and April, with more than three-quarters of those cuts occurring in the United States. What stands out is that almost half of them – about 37,600 positions – are tied to automation and artificial intelligence, according to reports.
But industry experts say it may be too early to conclude that modern AI systems are directly responsible for most of these job losses. Cognizant Chief AI Officer Babak Hodjat told Nikkei Asia that companies often cite artificial intelligence as a convenient explanation during restructuring.
"I don't know if they are directly related to actual productivity gains," Hodjat said. "Sometimes, you know, AI becomes the scapegoat from a financial perspective, like when a company hired too many, or they want to resize, and it gets blamed on AI."
Hodjat added that the real wave of AI-related labor shifts may still be ahead. "It will take another six months to a year before companies start seeing real productivity gains from AI," he said, noting that the transition "will be painful for all of us as we're going through it, and simply because it's a transition."
In the meantime, layoffs continue across major players. Oracle has reportedly cut more than 10,000 jobs, with the savings redirected toward data center investments and AI infrastructure.
Other executives have also warned of broader structural change ahead. Anthropic CEO Dario Amodei and Ford CEO Jim Farley have both predicted that AI could eliminate as many as half of all entry-level white-collar jobs in the United States.
A Stanford study has already found that entry-level coding and customer service positions are being affected, while an MIT simulation estimated that automation could replace 11.7% of the US workforce – equivalent to roughly $1.2 trillion in salaries.
Amid these projections, some executives are urging caution in blaming AI outright. "I don't know what the exact percentage is, but there's some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there's some real displacement by AI of different kinds of jobs," said OpenAI CEO Sam Altman, speaking at the India AI Impact Summit.
Some firms are already showing a different outcome. IBM, for example, has tripled entry-level hiring this year, saying that while AI may perform much of the routine work, human oversight remains essential. The company's position aligns with broader findings from European data, showing that businesses investing heavily in AI often expand their workforce rather than shrink it.
Cognizant – whose operations rely heavily on people – has also taken a measured approach. The company has established AI labs in San Francisco and Bengaluru to develop custom AI tools tailored to client needs. But Hodjat said Cognizant does not plan to cut staff. Instead, he said, employees will be trained to work alongside AI systems, and the firm even expects to hire more junior workers. He said many new graduates will struggle to find work because they lack practical, domain-specific skills, so companies will need to hire them anyway and train them on the job to use AI effectively in different fields.
For now, the tech industry sits in a state of transition – one where the impact of AI on employment is real but not yet fully settled. Whether it results in a long-term contraction or a redefinition of work may depend less on automation itself and more on how companies choose to adapt.