A-Infos (en) Bulgaria, ABL: Crisis in Tech Paradise, Part II: Thunder in Paradise (ca, de, it, pt, tr)[machine translation]

The abbreviations ---- Major layoffs by the giants in the sector began 
in the second half of 2022, with a total of 240,000 people laid off in 
the US by the end of January 2023. The total number of employees laid 
off for the entire period (June 2022 - December 2025) amounts to 
approximately 550,000 - 600,000 people globally. During peak phases, 
individual companies laid off an average of between 6% and 13% of their 
staff at a time. In total, for the entire three-year period, the 
technology giants (Big Tech) reduced their workforce by about 10% to 15% 
compared to their maximum levels from the pandemic peak in 2021. For the 
first 6 months of 2026, there are more than 100,000 new layoffs.

The direct consequences
Along with the layoffs, the "benefits" that highly skilled professionals 
enjoyed were also eliminated. Free food, break areas, and a flexible 
corporate culture were replaced by aggressive Return-to-Office policies 
and strict algorithmic controls over productivity.

While the salaries of narrow AI and cybersecurity specialists are 
growing, the real salaries of mainstream developers (Junior/Mid) are 
stagnating or falling under the pressure of inflation and increased 
market supply.

There is a massive shift from long-term employment contracts to 
short-term project engagements (freelance/gig). The IT specialist is 
progressively transformed into a precarious worker - a person whose 
economic existence is uncertain and dependent on market fluctuations day 
by day.

The reasons
The factors influencing the IT labor market are diverse. Moreover, the 
information that officials publish on the subject is not trustworthy - 
their goal is primarily to manipulate the market, not to explain what is 
happening. Here we will point out those factors that seem to be the most 
influential in our opinion.

Artificial intelligence
Undoubtedly, the so-called "Grand Language Models" have made a 
significant breakthrough in terms of automating intellectual work. 
Today, AI is not just a specialized machine for solving certain tasks - 
with its ability to successfully process human speech, it manages to 
largely replace people whose work is limited to creating text content. 
This includes a large part of the work of journalists, lawyers, even 
doctors and, last but not least, IT specialists.

As usual, not all work processes are subject to automation - mostly 
simpler routine tasks are subject to it. But AI is already an 
indispensable assistant to specialists in the field and easily performs 
many of the tasks that were previously transferred to novice 
specialists. The most vulnerable were junior engineers, software testers 
(QA) and technical support - advertisements for these positions have 
recently disappeared from the market. These changes allow companies to 
change the processes themselves. For example, the company Upwork cut 21% 
of its team on the grounds that with AI tools smaller teams can move 
much faster:

AI means that smaller, more diversely resourced teams in product and 
engineering can achieve greater impact than ever before. Fewer 
organizational layers mean faster decisions. The flatter the structure, 
the better...

Capital Redirection
While this reason may not sound so good to investors, it seems to be the 
most direct link between layoffs and AI. Companies are not laying off 
people because they have become redundant, but to free up budget for 
purchasing AI hardware and infrastructure or to better integrate into 
the (for now) growing AI bubble.

When Cisco laid off 5% of its workforce earlier this year, the CEO 
explicitly announced that the company was realigning its resources to 
invest in silicon, cloud infrastructure, and cybersecurity for AI. Meta 
increased its AI spending budget for 2026 to a staggering $145 billion, 
which immediately led to human capital optimization in its other 
departments.

AI Washing
We should not forget that capitalists would gladly lay off all the 
people just to save their wages. AI can be used simply as a cover for this.

If a company says, "We're laying off 10% of our people because we're 
losing market share," its stock price drops. But if it says, "We're 
laying off 10% of our people because we're transforming into a 
super-efficient AI-native company," Wall Street applauds and the stock 
price goes up. This trick is called AI Washing-covering up mismanagement 
or post-pandemic bloated staffing levels behind the mask of 
technological progress.

For example, in January 2024, Duolingo laid off 10% of its contractors 
(translators and content creators), stating that it was now using AI 
(GPT-4) to automate the creation of texts and lessons. In reality, the 
company was under enormous pressure from investors to move from a phase 
of rapid growth to a phase of high profitability. Cutting contractors is 
the easiest way to quickly optimize operating expenses (OpEx) before 
quarterly reports, while the quality of AI-generated content 
subsequently caused a wave of criticism from users.

Another example is Google, which cut hundreds of jobs in its ad sales 
department for large clients between December 2023 and January 2024. The 
explanation was that new AI tools (like Performance Max) would allow 
advertisers to optimize their campaigns without the need for human 
intervention. The real goal was to redirect the money into AI 
development, where thousands of new engineers were immediately hired.

The wage gap
The latter example illustrates another phenomenon in the sector - the 
growing gap between lower-skilled and higher-skilled professionals. 
While the salaries of entry-level and non-specialized developers have 
decreased, those of highly skilled specialists in the fields of AI and 
cybersecurity have increased. Salary increases in one department often 
have to be justified by layoffs in another.

The stratification of class
If we can talk about the "cognitariat class," it seems that the prospect 
before it is to include fewer and fewer people and to cost them more and 
more effort. If a few years ago a person could join this class by 
completing a university education (or even a serious programming 
course), it seems that in a few years it will be necessary to catch up 
in knowledge with people with decades of experience and even something 
more - to overtake the ever-developing AI, into which a huge part of the 
planet's investments are currently being poured.

All of this presents members of today's cognitariat class with an 
existential choice: To waste more and more of their lives trying to 
remain indispensable to their employers, while those same employers 
invest every penny of theirs to replace them. To accept their 
transformation into precariat, with the vague hope of some future 
somewhere between minimum wage and the most ancient profession. Or to 
resist by all means.

Read: Part III - The Resistance

20)https://www.anarchy.bg
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