Major U.S. companies are scrambling to cut their workforce. There were reports that Microsoft, which laid off 6,000 people last month, plans to cut thousands of jobs next month, and Amazon CEO Andy Jash predicted a decline in the number of employees due to increased use of artificial intelligence (AI) in the next few years. At one time, it was mainstream among U.S. companies that recruitment of talent was the foundation for future growth, but now, the opinion that the fewer employees, the faster the growth is, is gaining strength.
According to Live Data Technologies, an employment data provider, U.S.-listed companies have slashed their white-collar workers by 3.5 percent over the past three years. Over the past decade, one in five S&P 500 companies has lost jobs. In addition to big tech companies such as Microsoft and Amazon, job cuts have been brisk recently. Procter & Gamble announced that it will lay off 7,000 employees, or 15 percent of its non-manufacturing workforce, to create broader roles and smaller teams. Estee Lauder and dating app operator Match Group said they have laid off about 20 percent of their respective managers.
The Wall Street Journal (WSJ) pointed out that it shows a change in management philosophy of companies beyond simple cost reduction. With the introduction of Generative AI, companies can handle more tasks at less cost. However, it is more meaningful than introducing AI. The media said, “There is a growing idea that having too many employees is an obstacle in every large or small company.”
Normally, companies lay off employees during a recession and then hire more workers when the economy recovers. However, the trend has been changing in recent years. According to the Federal Reserve Bank of St. Louis, U.S. companies’ profits reached record highs late last year. Rather, they are fired when their performance is good.
“Everyone who has more than 500 employees, especially public companies, said they don’t need 30-40% of the team,” tech investor Jason Remkin, a former Adobe executive, told a venture capital podcast last month.
When Brian Moynihan took office as CEO of Bank of America in 2010, BoA had 285,000 employees. Since then, the company has closed branches, digitized more processes, and reduced the number of employees from 213,000 and management from 13 to seven. Sales are up 18 percent from 10 years ago. “We’ve created companies that are more productive with less staffing and lower costs,” CEO Moynihan told investors in April.
Between May 2022 and May 2025, managers were down 6.1% and executives were down 4.6% in listed companies, according to Live Data Technologies. Managers had an average of 4.2 direct subordinates in 2020, compared with 5.1 in 2023, according to personnel software provider Ratice.
Joseph Fuller, professor of business administration at Harvard Business School, pointed out that this trend could backfire and reduce employee productivity.
In particular, the introduction of Generative AI is igniting job cuts. CEOs of e-commerce platform Shopify and foreign language learning application Duolingo recently told their employees that new hires can only be made if they prove that automation is not possible.
Walmart has shortened its in-house clothing production period by up to 18 weeks by deploying AI agents. According to the disclosure data, the company recorded sales of $681 billion in 2024, up 40 percent from a decade ago. On the other hand, the number of employees decreased by 100,000 from a decade ago.
JENNIFER KIM
US ASIA JOURNAL
