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AI Layoff Wave of 2025: Salesforce's 4,000-Job Cut Is Just the Beginning

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AI Layoff Wave of 2025: Salesforce’s 4,000-Job Cut Is Just the Beginning
  • Salesforce replaces 4,000 support staff with AI: CEO Marc Benioff revealed Salesforce slashed its customer support workforce from 9,000 to 5,000 this year after deploying AI “agents” to handle half of all support interactions foxbusiness.com foxbusiness.com. “I’ve reduced it from 9,000 heads to about 5,000, because I need less heads,” Benioff said, noting AI now does 30–50% of the company’s work foxbusiness.com foxbusiness.com.
  • Wall Street banks follow suit: Morgan Stanley is laying off ~2,000 employees in 2025, with some roles eliminated because automation and AI have taken over their tasks entrepreneur.com. Executives expect more AI-driven cuts ahead, and a survey of 93 major banks suggests up to 200,000 jobs on Wall Street could be lost to AI in the next 3–5 years entrepreneur.com.
  • Mass layoffs in logistics and retail: UPS announced plans to cut 20,000 jobs (4% of its global staff) this year as it automates operations and streamlines delivery routes businessinsider.com. The courier is closing 73 facilities and converting 400 warehouses to partially or fully automated sites, aiming to “emerge as an even stronger, more nimble UPS” while halving its Amazon parcel volume businessinsider.com businessinsider.com. Amazon’s CEO Andy Jassy likewise told employees he expects the workforce to shrink as staff “get efficiency gains from using AI extensively” latimes.com.
  • Tech firms pivot amid AI boom: Beyond Salesforce, enterprise companies are restructuring to capitalize on AI. HR software maker Workday cut ~1,750 jobs (8.5% of its workforce) while refocusing on AI initiatives and hiring new talent with AI skills businessinsider.com. Oracle trimmed staff in its cloud division partly to realign resources for AI infrastructure growth economictimes.indiatimes.com. Even AI startups aren’t immune – Scale AI, for example, laid off 14% of its employees (200 people) and 500 contractors in mid-2025 as it restructured its generative AI team economictimes.indiatimes.com.
  • Reshaping the job market: Analysts note a sharp uptick in automation-driven layoffs. Challenger, Gray & Christmas reports U.S. employers announced 20,219 job cuts tied to “technological updates” (automation/AI) in 2025, including 10,375 cuts explicitly attributed to AI so far inkl.com. The World Economic Forum’s latest Future of Jobs survey found 4 in 10 companies expect to reduce staff in coming years due to AI adoption economictimes.indiatimes.com. While tech leaders insist “humans are not going away” and AI will work alongside employees latimes.com, 2025’s wave of AI-related layoffs has left many workers on edge about what efficiencies the next algorithm might bring.

AI Replacing Workers in Tech: Salesforce Leads the Trend

Tech companies have been on the forefront of integrating artificial intelligence – and now they’re seeing the workforce shake-ups that come with it. Salesforce made headlines this year when Marc Benioff confirmed the CRM giant cut about 4,000 customer support jobs after rolling out new AI-powered support bots foxbusiness.com foxbusiness.com. These “AI agents” can handle routine customer queries, generate content, and even manage websites automatically latimes.com. The efficiency gains were striking enough that Salesforce stopped backfilling many support roles. “With our AI agent platform, the number of support cases declined and we no longer need to actively backfill support engineer roles,” the company noted, adding that hundreds of employees were redeployed into other departments like sales and professional services foxbusiness.com. In essence, software now does work that thousands of humans did recently – a milestone Benioff has openly embraced. On a recent podcast he estimated AI is doing 30–50% of all work at Salesforce already foxbusiness.com. He touted this as a positive partnership between humans and machines: “Humans are not going away… we are working in partnership with these agents,” Benioff said, pushing back on doomsday notions of full automation latimes.com.

Salesforce is not alone. Workday, a major HR and finance software firm, announced in February that it would cut about 1,750 jobs – over 8% of its workforce – explicitly to reposition for an AI-driven future businessinsider.com. Workday’s CEO told employees the company will double down on areas like artificial intelligence and machine learning, even as it trims in other departments businessinsider.com. “The environment we’re operating in today demands a new approach,” he wrote, explaining that Workday would continue hiring for new roles in AI even as it lets go of people elsewhere businessinsider.com. In a similar vein, Oracle reportedly cut jobs in its cloud computing unit this year to save costs and realign for the AI boom, as the database giant invests heavily in AI infrastructure and services economictimes.indiatimes.com. And in the startup world, even an AI-centric company like Scale AI – which provides data labeling and model training services – found itself downsizing in 2025. Scale AI laid off 200 employees (14% of staff) and canceled hundreds of contractor positions amid a reorganization of its generative AI team economictimes.indiatimes.com. The irony of an “AI company” cutting humans is not lost, but it underscores how swiftly the competitive landscape is evolving. As one industry observer noted, AI is becoming a major driver of workforce reductions, with tens of thousands of job cuts this year linked directly to automation initiatives inkl.com.

Wall Street Banks Slash Roles as Automation Takes Over

It’s not just Silicon Valley feeling the impact – Wall Street is also seeing jobs vanish in the face of automation. In March, Morgan Stanley announced plans to lay off about 2,000 employees across the firm entrepreneur.com entrepreneur.com. Notably, this wasn’t framed as just belt-tightening for the economy’s sake. Insiders confirmed that while some cuts are performance-related, others are happening because AI has automated their roles in the bank entrepreneur.com. Routine, rules-based tasks in areas like support, administration, and even aspects of trading are increasingly handled by algorithms. A Bloomberg source said Morgan Stanley expects more job reductions due to AI in coming years as these technologies advance entrepreneur.com. In other words, this round of layoffs could be just the beginning of a longer-term overhaul in finance.

Morgan Stanley’s CEO, Ted Pick, has been aggressively rolling out AI tools internally – from an AI-powered knowledge assistant that retrieves research for advisers, to automated note-taking for client meetings entrepreneur.com. These tools can save employees 10–15 hours a week of grunt work, improvements Pick calls “potentially really game-changing” for productivity entrepreneur.com. The flip side is that the bank may need fewer entry-level analysts and support staff as a result. A report by Bloomberg Intelligence earlier this year surveyed tech leaders at major banks and found they anticipate cutting about 3% of their workforce in the next 3–5 years thanks to AI adoption entrepreneur.com. For the U.S. banking sector, that could mean up to 200,000 jobs eliminated through automation of various tasks entrepreneur.com. Indeed, Morgan Stanley’s move is part of a broader wave – Goldman Sachs, JPMorgan and other top banks have all been investing in AI to streamline operations, from trading to compliance. Goldman has even developed its own in-house AI assistant for employees, though it insists there are “no immediate plans” for AI-driven layoffs yet allwork.space. Still, the writing is on the wall: many Wall Street firms view AI as a means to “do more with fewer people.” As one financial technology analyst quipped, the back-office banker who toiled over PowerPoint and Excel all night may soon go the way of the floor trader, replaced by bots that never sleep.

Not everyone is sanguine about this shift. Bank executives stress that freed-up employees can be retrained for higher-value work – advising clients, developing strategy, etc. – rather than simply shown the door. And certainly, the finance industry will continue to need talent, especially people who can work with AI tools. But the labor market for junior roles is already tightening. In fact, overall tech job postings in the U.S. are down ~36% from early 2020, partly due to automation, according to Indeed data finance.yahoo.com. The trend has prompted warnings even from inside the industry. As Goldman Sachs economists noted, generative AI has the potential to “drastically affect” many white-collar jobs, including the entry-level Gen Z tech and finance roles that traditionally feed the industry timesofindia.indiatimes.com. 2025 is proving to be the year those abstract projections started becoming very real on Wall Street.

Automation Hits Retail and Logistics Hard (UPS, Amazon, and More)

Artificial intelligence and robotics aren’t just a behind-the-scenes phenomenon – they’re directly affecting frontline and operational jobs in retail and logistics. A stark example came from UPS, the global package delivery giant, which in April announced a sweeping plan to eliminate 20,000 jobs in 2025 businessinsider.com. That’s about 4% of UPS’s workforce worldwide. CEO Carol Tomé explained to investors that this is part of a broader overhaul to embrace automation and cut costs after pandemic-era growth leveled off businessinsider.com. UPS is shuttering 73 sorting facilities in the U.S. by mid-year and upgrading 400 remaining warehouses with automated systems to reduce labor needs businessinsider.com. Many of the roles on the chopping block are lower-level package handlers and sorters – tasks increasingly done by high-speed sorting machines, scanners, and AI-directed robotics. The company also revealed it will scale back deliveries for its largest client, Amazon, by 50% over the next couple of years businessinsider.com. Amazon’s own logistics network has grown so much that UPS sees diminishing returns in that partnership. By cutting Amazon volume (which is heavy on residential, lower-profit stops) and automating hubs, UPS expects to save billions and “emerge as an even stronger, more nimble UPS” in the long run businessinsider.com. But for the workers in those 73 closing facilities, it’s cold comfort – their jobs are essentially being designed out of the system.

Unions are, unsurprisingly, pushing back. The Teamsters – which represent UPS drivers and warehouse workers – have vowed to “fight any layoffs” that violate their newly inked labor contract businessinsider.com. (Notably, that contract, signed in 2023 after a strike threat, secured wage hikes but did not include explicit protections against automation-related job cuts wsws.org wsws.org.) Union leaders accuse UPS of rushing to slash jobs to please shareholders, and they warn of possible labor actions if high-paid drivers are forced out. UPS, for its part, has offered some veteran drivers buyouts to encourage voluntary departures wsws.org. Industry analysts say UPS is trying to mirror the efficiency of Amazon’s own warehouses, which heavily use robots, AI route planning, and minimal human staffing in newer facilities. It’s a dramatic example of how even a traditionally labor-intensive business like parcel delivery is being transformed by automation.

Amazon itself is a bellwether in retail automation. The e-commerce titan has spent years investing in warehouse robots and AI-driven software to manage inventory and shipping. CEO Andy Jassy signaled this year that as Amazon deploys AI more deeply, it will likely need fewer employees over time latimes.com. In a June company meeting, Jassy remarked that Amazon’s vast workforce could shrink as “employees get efficiency gains from using AI extensively” latimes.com. In plain terms, tools like AI-assisted code generation, demand forecasting, or customer service chatbots should allow each employee to accomplish more – enabling the company to do the same work with a smaller headcount. We have already seen Amazon curtail hiring in certain departments and automate roles like store cashiers (via its “Just Walk Out” AI-driven stores) and, experimentally, fast-food ordering in its subsidiary chains. While Amazon hasn’t announced a mass layoff explicitly due to AI, it did carry out sweeping job cuts affecting 27,000 staff from late 2022 through 2023 for cost efficiency. Now, with Jassy openly tying future staffing to AI efficiencies, it’s clear where things are headed.

Traditional retail is experiencing similar currents. Grocery chains and big-box retailers are rapidly installing AI-powered self-checkouts and inventory management systems. Each self-checkout stand might replace one or two cashier jobs per shift. It’s incremental at each store, but across thousands of locations it adds up. Kroger, for instance, announced in August it will eliminate nearly 1,000 corporate roles as part of a streamlining (following a failed merger) businessinsider.com. While Kroger didn’t cite AI as the reason, industry experts note that major retailers are investing heavily in automation – from warehouse robots that pack groceries to AI-driven analytics that can cut out layers of middle management. Walmart has touted its use of AI to optimize everything from stocking to scheduling. And clothing retailer Nike (which cut jobs earlier in 2025 according to reports) has been using AI for demand forecasting, potentially reducing the need for as many planners and analysts. In sum, the retail and logistics sectors are shedding certain roles even as they scramble to hire for new tech-focused positions. As the Economic Times observed, companies across retail and finance are “making layoffs as they try to save costs and adjust to new changes like AI and automation” economictimes.indiatimes.com.

A New Era of Workforce Restructuring – Expert Insights and Outlook

Taken together, the developments of 2025 point to an inflection point in the labor market. The rapid advancement of AI – particularly generative AI and machine learning – is no longer just an experimental tool, but a cost-cutting instrument being wielded by executives. Challenger, Gray & Christmas, a firm that tracks layoffs, notes a “significant acceleration” in tech-driven job cuts this year inkl.com. Through the first half of 2025, over 20,000 U.S. jobs were eliminated due to automation and “technological updates,” including more than 10,000 cuts specifically blamed on AI implementation inkl.com. These are unprecedented numbers. For comparison, AI-related layoffs were barely on the radar a few years ago. Now they’re nearly a fifth of all announced job cuts in some months inkl.com. “AI is becoming a major driver of workforce reductions,” Fortune observed, citing the Challenger data x.com. This trend spans industries: tech, finance, media, retail, manufacturing – all are experimenting with AI to streamline operations, often with fewer workers as the end result.

What do the experts and leaders say about where this is headed? On one hand, there is a chorus of optimistic executives claiming that AI will augment human workers, not simply replace them. Marc Benioff is adamant that humans and AI working together is “not dystopian at all” but “reality” now foxbusiness.com foxbusiness.com. IBM’s CEO Arvind Krishna has argued that AI will take over mundane tasks so that staff can focus on higher-value work – even as he acknowledged IBM will pause hiring for roles it can automate, potentially eliminating 7,800 jobs over the next five years through attrition reuters.com. Similarly, bank CEOs talk about re-skilling employees for “new jobs of the future” that AI will create. There is truth to the creation of new roles: demand for AI specialists, data scientists, and robotics engineers is soaring. The World Economic Forum predicts millions of new jobs in tech fields will emerge by 2030, and jobs in areas like big data and AI are expected to double by the end of this decade economictimes.indiatimes.com.

Yet even the optimists concede that in the short term, many traditional roles will disappear. The WEF’s Future of Jobs Report 2025 found that 75% of employers plan to adopt AI technologies by 2027, and nearly 40% expect to cut workers in roles that become redundant or less needed due to that adoption washingtoninformer.com economictimes.indiatimes.com. We’re already seeing that play out in 2025’s layoff announcements. As one fintech executive bluntly put it, “If we can automate something and save money, we will – that’s the reality of business.” For employees, especially those in support, administrative, or entry-level analytical roles, this means a period of uncertainty and transition.

Labor economists point out that previous waves of automation (from factory robots to ATMs) ultimately created new jobs even as they destroyed some old ones – but the transition can be painful. In this AI wave, the pain is being felt by highly skilled white-collar workers too, not just routine factory or clerical staff. A recent study by the Federal Reserve Bank of St. Louis even suggested that AI advances may be contributing to recent layoffs in fields like technology and engineering, hinting at an “early sign of AI-driven labor displacement” in the data fortune.com. If so, this could be the beginning of a broader restructuring of work.

For now, companies are sending a clear signal: roles that can be automated will be. The remainder of 2025 and beyond will test how far this can go. Will we see a backlash – political or social – against AI taking jobs? Regulators in some regions are already discussing requiring impact assessments for AI deployment on employment. Notably, New York City passed a rule requiring companies to disclose if AI was involved in making layoff decisions entrepreneur.com. But such measures are in their infancy.

In the meantime, workers are bracing for more announcements like the one from Salesforce or UPS. The hope is that as mundane tasks get handed off to algorithms, humans will find more creative, empathetic, and complex work to do alongside these machines. As Salesforce’s Benioff put it, “We are working in partnership with these agents” latimes.com – suggesting a future where your colleague might be an AI. But the wave of layoffs in 2025 shows that partnership can be a double-edged sword. For thousands of employees this year, the “efficiency gains” of AI came at a very real cost: their jobs.

Sources:

Are Salesforce Jobs Really Dying in 2025? The Truth About Layoffs, AI & Career Opportunities
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