May 13 was a normal morning for employees at LinkedIn until midday, when they were inundated with meeting invites announcing news no one wanted to hear. The professional social network owned by Microsoft quietly bided its time to tell employees that some five per cent of its worldwide employees will be sacked. Many inside the tech industry felt there was no company, regardless of its stability, that was truly invulnerable, as they’ve seen similar news make the rounds for months. But as soon as the word got inside, it was still a hard blow. According to one person with knowledge of the situation, LinkedIn intended to announce Wednesday that it would be laying off staff. What had been a reality began to sink in.
The severance comes as part of a restructuring that will impact about 875 people at LinkedIn from its worldwide workforce of over 17,500 full-time employees. The move is part of a wider initiative to restructure teams and target resources on areas the business is actually growing, according to a source on the condition of anonymity. That distinction matters. This restructuring is not a typical cost-cutting move that some tech firms are making, but rather seems to be geared toward reallocating resources to the more thriving parts of the business. The company is a seller of recruiting tools, as well as premium subscriptions for professionals, and Microsoft’s securities filing shows that LinkedIn’s revenue increased 12 percent in the recently concluded quarter compared with the same period a year ago, a step up in growth for this year. This is not a company in freefall, in other words. It’s a business pruning to allow others to grow.
It’s a round of layoffs that is particularly fascinating because of what it’s not about. The source told Reuters that the reason was “not for AI to take over jobs at LinkedIn.” That’s notable because the threat of AI-powered disruption has loomed over the entire software industry for the past two years. Ask any developer or project manager over in Silicon Valley and they’ll tell you they’re concerned about the survival of their job five years down the road. The executives at LinkedIn clearly state that AI isn’t the bad guy here. Nevertheless, the big picture cannot be overlooked. From factory to factory, technology firms are refocusing their efforts on artificial intelligence and the impact on jobs has been remarkable.
Take a look at the numbers released by Layoffs.fyi, which keeps a close eye on tech layoffs. This year, the number of tech workers who lost their jobs exceeds 103,000.A total of over 103,000 tech workers have lost their jobs this year. Almost there at the site, which is counting for nearly 124,000 cuts for the year of 2025. But the tempo does not seem to be slowing. In February, Block announced the layoffs, which would cut almost half of its staff, under Jack Dorsey’s leadership. Cloudflare announced a similar 20% reduction this last week. These reports come after a Reuters report earlier this week that Meta Platforms was planning a layoff in May. Here, the company that LinkedIn has just followed, and with a relatively small five per cent cut, it’s a sign the industry is not yet on its feet.
The experience is very personal for the employees that will be directly affected. A person who was informed said that it was a combination of shock and resignation. Many had seen others go through similar experiences and were prepared, but it was no easier to talk through the conversation. The company of LinkedIn’s size and reputation should be doing this and will provide severance and outplacement to some. Others will start updating their own LinkedIn profiles, a darkly ironic practice that’s common across the tech industry. The firm has not made public the list of the teams that will be hit, nor could Reuters figure out which divisions will be hardest hit.
So, what does this mean for the average professional who is on LinkedIn to connect, look for a job, or search for new hires? It’s probably not a great deal in the short term. The platform’s fundamental features will continue as usual, and the platform has a strong presence in the way business people connect. The layoffs, however, do suggest some sensible questions about the company’s long-term plans. In what kind of world makes it make sense to reduce staff by 5 percent while revenues are increasing by 12 percent? The reason probably rests on the disparity between growth of the top line and the profitability. It’s a good thing that revenue is increasing, but a bad thing when revenue is increasing while you are operating inefficiently.Increasing revenue is good, but it’s bad when increasing revenue while operating inefficiently. As the parent company, Microsoft has got its expectations too high to meet, and cutting down on the workforce is one of the easiest methods for increasing its margin.
There’s another thing to consider. In fact, some industry executives say that AI is changing work, not taking it away. For example, there are numerous software developers that have been making use of AI to create the codes for them, but that doesn’t imply that the variety of software developers is decreasing. It could be that they concentrate on higher level problems and the machines on repetitive tasks. If that’s the case, LinkedIn might actually be right, and instead, a carefully-worded strategy to defuse a panic in the remaining workforce. But whatever the case is, the belief held by tech workers is that eventually some types of jobs will be replaced by AI, which translates into behavior, hiring, and investment.
There’s some upside, as LinkedIn’s restructuring isn’t just about cutting everywhere, but also about strategy. The company is investing in growth areas, but has not announced them publicly. This may be an increase in investment in its learning platform, its sales navigator, or its new capabilities on AI‑powered job matching. On the down side, 5 percent of the workforce is 5 percent. For the people impacted the strategic reason is of little importance compared to what is happening to them right now – a lack of paycheck – and what will happen next. But for the tech industry as a whole, every new round of job cuts weakens the confidence that seemed woven into the fabric of tech.
