At Struggling and Thriving Companies Alike, Employees are Getting the Chop

These are hard times for oil companies, and these are boom times for most technology companies. Much separates the two industries, but they have something in common: They’re both shedding staff.

Quartz, which is both a mineral and a publication that has experienced its mortifying saga involving AI and staff reductions, reports the following:

On Tuesday, oil giant ConocoPhillips said it will slash up to 25% of its workforce, or about 3,250 roles — a pattern now visible across many other oil and gas companies. Chevron has likewise announced up to 9,000 cuts likely this year. Too much oil in the market and too little confidence in future demand have squeezed margins across the industry, so companies like Conoco and Chevron are leaning on job cuts to preserve cash flow. It makes sense, even if it’s not a pretty trend.
Layoffs at Big Tech companies also appear elevated, but the profit and growth story in that sector could hardly be more different. Even as companies post record second-quarter profits and boast of expanding margins and AI breakthroughs, players large and less-large are slashing headcount.

Companies can struggle, as they’ve done recently in the oil industry, or they can thrive, as many have done in the technology sector, but employees seem to get it in the neck either way. Failure is not an option — except for a period of time at places like Facebook (now Meta), where failure at speed was encouraged — so one can grasp why employees might pay the price when companies fall short of realizing their objectives.

How, though, can we explain the staff cuts at salubrious technology companies, many of whom are achieving record revenue and profit? Historically, corporate failure, of one sort or another, typically preceded job cuts. Now, however, even impressive business prosperity and sustained corporate success cannot assure job security for those who toil beyond the plush environs of swank corner offices or far away from the timbered elegance of mahogany row.

If you’re not among the techno-courtiers attending Trump’s struggle sessions at the White House — how embarrassing, how humiliating, for those billionaires who must grovel, rather than sing, for their supper? — you might have to keep your resume continually updated. (Regarding last night’s obsequious White House dinner, Nvidia CEO Jensen Huang declined to attend, whereas Elon Musk, the godfather of DOGE, was apparently not invited.)

AI Not the Only Factor

Getting back to the sacking of employees in the technology sector, is it possible that AI is the bloody scythe wielded by profit-maximizing CEOs? Well, that appears to be true at Salesforce. Despite a revenue increase of 10%, engorged profits, and enough money on hand for $20 billion in stock buybacks (always near the top of the shareholder hit parade), the company slashed 4,000 support jobs. CEO Marc Benioff infelicitously explained that he “needs less heads” — Marc, the word you should have used is “fewer,” not “less” — given that AI agents serve about a million customer conversations.

More than a million served? Back in the early days of McDonald’s, I remember an ever-changing count of burgers served that appeared just under the Golden Arches of franchise stores. Maybe Benioff can keep a running tally of his AI-support count on an LED billboard alongside the 101 in Silicon Valley. I can envision it now: “Over 50 million served by our AI agents!”

Benioff’s former employer, Oracle, is also indulging in the layoff craze. Again, it’s not because Oracle is doing poorly. In the company’s fourth-quarter financials, Oracle reported revenue of $15.9 billion, up 11% year-over-year. Net income was a strapping $3.4 billion, and Oracle shares are up 33% in 2025. The numbers are expected to remain healthy when Oracle reports again, but employees are being shown the door nearly everywhere Oracle hangs its shingle.

According to the San Francisco Chronicle, Oracle, after previously laying off 188 employees in Redwood City and Pleasanton, now will dispatch an additional 254 employees in the Bay Area. The latest staff reductions are distributed across the Bay Area, with 187 cuts in Redwood City, 36 in Pleasanton, and 31 in Santa Clara, according to compulsory filings with California state authorities.

As they say in insipid infomercials, that’s not all. Here’s a brief excerpt from the SF Chronicle article:

Corporate FOMO

Oracle also laid off 101 workers in Seattle, according to a filing to Washington state officials. On social media, Oracle workers in Kansas, Massachusetts, Texas and elsewhere reported that they were laid off.

Despite remarkable growth and profitability, other industry giants are dumping staff, too. Microsoft has laid off 15,000 employees this year, even though it has gone from strength and strength financially. In Microsoft’s latest quarter, revenue reached about $80 billion and net income totaled $27 billion, up 24% y/y.

Microsoft and Amazon are both charging headlong into AI, and we can reasonably assume that AI at both companies is doing more than boosting human productivity. We don’t have a quantitative measure of how many jobs AI is claiming. As far as I know, nobody is counting, at least officially. There is, to the best of my knowledge, no regulatory requirement to report AI-related job loss, irrespective of how one might wish to define such a thing.

Cisco, too, is shedding staff in a quest for greater efficiency and optimized productivity. Staff cuts at Cisco have come at a relatively steady cadence, and hundreds more employees, many in software engineering, are now being jettisoned. The staff reductions are occurring even though the networking behemoth reported revenue that increased eight percent to $14.7 in the just-completed quarter. In 2024, Cisco shed approximately 5,000 employees, about 7% of its workforce at the time. The justification then involved a reallocation of resources, broadly speaking, toward what Cisco characterized as “high-growth areas,” which includes Cisco’s AI-related initiatives.

We could easily add to the list of technology corporations that are getting bigger in revenue and earnings while getting smaller in headcount. It seems to be a follow-the-leader phenomenon, a bit like FOMO, though what they’re anxious to avoid missing is the consignment of staff to unemployed status.

It’s important to remember, for us to keep in mind, that every job cut involves a person. Each of those people might have a family, might carry a mortgage and car payments, might have student debts, and will definitely have bills to pay and other unavoidable costs to cover. We are referring not merely to numbers, but to lives. I understand that staff reductions are inevitable and often justified, but we’re currently witnessing seem to be corporate exercises in optionality as opposed to acts of necessity.

Cisco: Then and Now

I can recall when Cisco, after many years of blitzkrieg growth, had to make its first substantive layoffs. That was when the dotcom bubble had irrevocably burst. For Cisco, the aftershocks compounded the initial market implosion. Many of Cisco’s customers went out of business or were compelled by exigency to significantly reduce their network-infrastructure spending on switches and routers.

It was way back in March 2001 when Cisco initiated the first major layoff in the company’s history. Cisco announced that 8,000 jobs would be eliminated (the official count was later revised upward to 8,500) as sales plummeted and inventory write-offs amounted to more than $2 billion. In a span of 13 months, Cisco’s stock price collapsed, falling from a pre-burst high of $82 to $13.63. Those were layoffs that could be justified by hard times, but Cisco still seemed contrite, genuinely distressed at having to part with so many employees.

John Chambers, Cisco’s CEO at the time, reportedly struggled to sleep the night before the layoffs were announced. Although Cisco dishonestly and euphemistically presented the layoffs as “involuntary attrition,” the recourse to equivocation probably resulted at least as much from shock as from disrespect for the departing employees. Layoffs of that scale, practically of any scale, were foreign to Cisco until then. Layoffs were what failing companies did, and they happened to employees in antiquated, senescent industries.

Now, though, layoffs happen on a semiregular basis at Cisco, as at other major technology companies in Silicon Valley and beyond. Senior executives at technology companies are hardened, inured to what they see as business as usual. My point is, at one time in the technology industry, regular recurring layoffs were not customary business practice.

What’s more, when Cisco executed its massive layoff back in 2001, it did so under economic duress. Revenue was falling fast, inventory was piling up, growth had turned from positive to negative, and the share price was in free-fall. None of that is happening at Cisco today; nor is anything that dire occurring at Microsoft, Amazon, Oracle, or Salesforce. These companies, to varying degrees, are stunningly prosperous, producing impressive (sometimes record) revenue and earnings growth with each successive quarter.

What would have been unlikely, if not unthinkable, is now commonplace: Growing, profitable companies, unthreatened by business hardship, are laying off employees purely to achieve higher metrics in efficiency and productivity.

A Turning Point, but Where Are We Going?

I suspect that AI is part of it — leveraged to take jobs once performed by humans — but that doesn’t seem to be the whole story. A cultural change has occurred in the technology industry. It’s a leaner, meaner industry now, like any other mature economic sector. The broader business culture, beyond the technology industry, has changed, too. There’s also a reciprocity effect at work because advances and implements from the technology industry have helped facilitate the metamorphosis in the business culture.

The upshot is that layoffs, once viewed as the last resort of faltering businesses, are now applauded by Wall Street analysts and institutional investors, even when they are enacted at companies that are objectively thriving.

I suppose 2001 was a long time ago. Much has changed since then, in technology and in the nearly every other facet of life. Businesses and the people who work for them will adapt, as they’ve always done. Nonetheless, it feels as though today’s corporate insouciance toward continual layoffs is a turning point. But where is it leading?