It’s the business cycle, mostly. During the pandemic, low interest rates drove a boom in risk investing that flowed downhill into tech company balance sheets. Of course everyone used the money to hire lots of developers and engineers - probably more than were needed for the business opportunity they were exploiting.

I think AI is being used as an excuse for layoffs rather than the cause. Companies don’t have the cash and times got a bit too rich. This is the cyclical pull back that has been going on for decades.

It's probably a mix of AI productivity boost and market cycle. There is some substance to AI job loss, but I believe jevons paradox will eventually catch up to transformer-based LLM capabilities.

I'm the last remaining frontend developer after multiple rounds of layoffs. With claude code I'm able to do 2x-3x the work I was able to do before it existed. It's hard for me to rationally argue we need more frontend developers.

Either? Both? The question is too zoomed-out. It's going to be different for each company and maybe different for each round of layoffs.

The "real impact" of AI being gargantuan spending, or something else?

Both. AI can help you be more productive with fewer people, but a growing company still needs many people commanding AI to expand into a market.

The public reason given for a layoff is always a self-serving excuse.