Tech companies worldwide have laid off 131,687 people at 318 companies in 2026 as of October 10, according to Layoffs.fyi, already more than the 122,606 it counted for all of 2025. In the US, employers named AI as the reason for 120,136 announced job cuts from January to September, about 21% of all cuts and the most-cited reason this year, per Challenger, Gray & Christmas (October 1, 2026).
Large public companies account for many of the biggest named cuts. Inside venture-backed AI startups, the pattern is different. Startups shut down after their product turned into a feature of a bigger platform, cut deep after a round failed to close, or lost their founders to a big tech company in a licensing deal and shrank around what was left.
This tracker lists verified layoffs, shutdowns and post-deal cuts at AI startups from 2024 to October 2026, each with its funding context and a dated source, followed by the big-company cuts that drove the headline numbers.
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AI startup layoff tracker, 2024 to 2026
Headcounts are as reported. Where a company did not confirm a number, the table says so. Newest events first.
| Company | What it does | When | What happened | Jobs affected | Funding context | Source |
|---|---|---|---|---|---|---|
| Relay | AI workflow automation | Jul to Sep 2026 | Closure announced in July, completed September 14; founder and CEO Jacob Bank rejoined Google as VP of Product for Chrome in August, and some staff joined the Chrome team | Company shut down; number of staff affected not disclosed | Not disclosed | TechCrunch |
| ClimateAi | Climate-risk forecasting for food and agriculture | Aug 2026 | Shut down; the company said it would return capital to investors | Company shut down; number of staff affected not disclosed | $38M raised | AgFunderNews |
| Darrow | Legal AI for finding class actions | Jul 2026 | Restructure; the company says it is not a cost cut | 60 of about 180 (reported by Calcalist; not confirmed by Darrow) | Not disclosed | Artificial Lawyer |
| Hailo | Edge AI chips | Jun 2026 | Layoff after its planned SPAC merger stalled | 110, about 50% of staff | $340M raised; $120M at a $1.2B valuation, Apr 2024 | Globes |
| AI21 Labs | Large language models | May 2026 | Layoff; said it would stop developing its Jamba models and focus on its Maestro agent product | 110 of 180 | $200M at a $1.4B valuation, 2023 | Globes, Calcalist |
| Huxe | AI-generated audio app | May 2026 | Shut down a day after Spotify released a similar feature | Company shut down; number of staff affected not disclosed | $4.6M raised | TechCrunch |
| Yupp | Crowdsourced AI model comparison | Mar 2026 | Shut down | Company shut down; number of staff affected not disclosed | $33M seed, 2024 | TechCrunch |
| Robin AI | Legal AI | Jan 2026 | Microsoft hired at least 18 former employees, including the former CTO, as the company was broken up | Not disclosed | At least $61.5M raised by late 2024 | Bloomberg Law |
| xAI | Frontier AI lab (Grok) | Sep 2025 | Layoff in the data-annotation team | About 500, roughly a third of a 1,500-person team (reported by Business Insider) | Not disclosed | TechCrunch |
| Windsurf | AI coding tool | Aug 2025 | Cognition, which bought the company after Google’s $2.4B deal took its CEO and research leads, cut staff and offered buyouts | 30, plus buyout offers to about 200 remaining staff | Google’s $2.4B licensing and hiring deal, Jul 2025 | TechCrunch |
| Scale AI | AI training data | Jul 2025 | Layoff weeks after Meta’s investment and the hiring of founder Alexandr Wang | About 200 employees (14%), plus 500 contractors | Meta’s $14.3B investment, Jun 2025 | TechCrunch, CNBC |
| Builder.ai | AI-assisted app development | May 2025 | Insolvency | About 270 of roughly 770 staff (35%) cut in April 2025, before the May insolvency | Over $450M raised | Tech.eu, Tech.eu |
| Humane | AI Pin wearable | Feb 2025 | AI Pin discontinued; HP bought the assets for $116M and took the engineers and product managers | Not disclosed | More than $230M raised | TechCrunch |
| Character.AI | AI chatbots | Aug 2024 | Layoff weeks after a Google licensing deal brought back its founders | At least 5% of about 120 staff, mostly marketing and recruiting (reported by The Information) | Google deal reported at about $2.7B (WSJ) | Tech Startups, PYMNTS |
| Stability AI | Image generation models | Apr 2024 | Layoff after CEO Emad Mostaque resigned | More than 20, about 10% of staff | $101M at a reported $1B valuation, Oct 2022 | CNBC, TechCrunch |
| Inflection AI | Consumer chatbot (Pi) | Mar 2024 | Microsoft hired two of its co-founders and most of the staff | Most of a 70-person staff left for Microsoft | Microsoft paid a reported $620M license fee plus about $30M | Spyglass, citing The Information |
For the wider picture of AI companies that raised at lower prices or collapsed, see the AI down rounds tracker.
Four ways AI startups shed staff
Shutdowns. The company stops. Builder.ai entered insolvency in May 2025 after restating its revenue and cutting about 270 staff a month earlier; its new CEO said it owed $85M to Amazon and $30M to Microsoft, according to Tech.eu. The 2026 shutdowns so far include Yupp, which had raised a $33M seed round; Huxe, with $4.6M raised; ClimateAi, with $38M raised; and Relay, a five-year-old workflow tool that closed in September.
Cuts at companies that keep going. The company survives with a smaller team. AI21 Labs laid off 110 of its 180 employees in May 2026; Hailo cut 110 people, about half its staff, in June after its planned SPAC merger stalled. Stability AI cut about 10% in April 2024, a month after its CEO resigned.
Deals that take the founders. A big tech company pays a license fee or makes an investment, hires the founders and senior staff, and leaves the startup to carry on with whoever remains. Cuts at the remaining company have often followed. Scale AI laid off about 200 employees weeks after Meta’s $14.3B investment brought founder Alexandr Wang to Meta. At Windsurf the cuts came from a new owner: Cognition bought the company after Google’s $2.4B deal took its CEO and research leads, then laid off 30 staff and offered buyouts to the rest within weeks.
Reorganizations at large AI labs. xAI cut about 500 people from its data-annotation team in September 2025, telling them it no longer needed “most generalist AI tutor positions,” according to Business Insider as reported by TechCrunch.
Why AI startups are cutting in 2026
Funding has piled into a few very large rounds
Disclosed AI startup funding reached $561B from January to September 2026, up from $209.7B in the same months of 2025, and most of it went to a small number of companies. In Bot Memo’s AI funding data, 113 rounds of $500M or more took 72.1% of the $561B in disclosed AI startup funding from January to September 2026, up from 47.8% in the same months of 2025. The median disclosed round was $11.6M, against $11.2M a year earlier.
The typical round barely moved while the share going to $500M-plus rounds jumped. Two companies in the tracker show what can follow funding pressure. Robin AI had raised at least $61.5M by late 2024 and was being taken apart by January 2026, with Microsoft hiring at least 18 of its former staff, according to Bloomberg Law. Hailo’s last big round valued it at $1.2B in April 2024; by June 2026 it had cut half its staff. Monthly totals are in our August 2026 AI funding report.
Model makers and big platforms keep shipping the same product
TechCrunch linked two of the 2026 shutdowns to larger companies offering similar features. Huxe, built by former NotebookLM developers, closed the day after Spotify released a similar personal podcast feature. Relay, an AI workflow tool, “struggled to hold on to a reason to exist as a stand-alone product” once OpenAI, Google and other platforms built similar automation into their own tools, per TechCrunch. When Yupp closed, CEO Pankaj Gupta wrote that what AI models can do had “changed dramatically in the last year alone.”
License-and-hire deals leave a smaller company behind
Microsoft’s March 2024 deal with Inflection set the template: a reported $620M license fee plus about $30M for the right to hire most of a 70-person staff, according to The Information as reported by Spyglass. Amazon followed with Adept in June 2024; Semafor reported that Adept kept about a third of its employees and would receive around $25M, while investors who had put in $414M would roughly get their money back. Google’s Character.AI deal in August 2024 was reported at about $2.7B, and Character.AI cut at least 5% of its remaining staff weeks later.
Nvidia’s deal with Groq in December 2025 took founder and CEO Jonathan Ross and president Sunny Madra. Six months later Groq raised $650M and hired new executives, according to TechCrunch. Groq did not disclose a new valuation at the time; it had been valued at $6.9B in September 2025.
Regulators have noticed. The UK’s Competition and Markets Authority reviewed the Microsoft and Inflection arrangement as a merger and cleared it on September 4, 2024. The US Federal Trade Commission had been examining the same deal since June 2024, per law firm Noerr. In January 2026 FTC Chairman Andrew Ferguson said the agency was “beginning to examine these acqui-hires” to check they were not a way around merger review, according to Reuters.
How much of this is really AI?
Challenger has tracked AI as a stated reason for US job cuts since 2023. Employers cited it for 4,247 cuts that year (Challenger, December 2023), 54,836 in 2025 and 71,825 across 2023 to 2025 combined (Challenger, December 2025), which leaves about 12,700 for 2024. The 2026 count reached 120,136 by September.
Total US job cuts are falling while tech cuts climb. Challenger counted 573,195 announced US job cuts from January to September 2026, down 39% from the same period of 2025, while technology companies announced 165,925, up 54%. Tracking tech layoffs worldwide, Nikkei Asia attributed 47.9% of 78,557 cuts in the first quarter of 2026 to AI and workflow automation, as reported by Tom’s Hardware.
An employer naming AI is not proof that AI did the work. Lisa Simon, chief economist at Revelio Labs, told CBS News that “for now, AI is a little bit of a front and an excuse,” and that the technology is affecting hiring more than layoffs. Klarna, one of the best-known cases of a company crediting AI for a smaller workforce, shrank “from about 5,000 to now almost 3,000 employees” partly through AI and partly by not replacing people who left after a hiring freeze. CEO Sebastian Siemiatkowski told CNBC in May 2025 that natural attrition runs at 15% to 20% a year. In a separate Bloomberg interview the same month, he said Klarna would recruit more human customer service agents.
The big-company cuts behind the headlines
Public companies drive the large numbers. A Financial Times analysis in July counted nearly 140,000 US tech job cuts in 2026 to that point, with Amazon, Oracle, Meta and Microsoft accounting for almost 50,000, as they put hundreds of billions of dollars into AI data centers, according to TechCrunch (July 2026). More on how that spending reaches startups is in our piece on AI capex and its impact on startups.
| Company | Announced | Cut | Stated reason | Source |
|---|---|---|---|---|
| Block | Feb 26, 2026 | More than 4,000 people, nearly half of its 10,000-plus staff | Jack Dorsey: “Intelligence tools have changed what it means to build and run a company.” | Yahoo Finance |
| Atlassian | Mar 2026 | About 1,600 jobs, about 10% | Cuts to fund AI and enterprise sales investment | Information Age (ACS) |
| Oracle | Mar 31, 2026 | Reported as up to 30,000 | Termination emails to staff cited organizational changes | CIO |
| Meta | Apr 23, 2026 | About 8,000 jobs, 10%, from May 20 | Memo: cuts help “offset the other investments we’re making” | NPR, CNBC |
| Coinbase | May 5, 2026 | About 700 jobs, about 14% | Crypto market volatility and repositioning for AI | Reuters, via Yahoo Finance |
| Freshworks | May 2026 | About 500 jobs, 11% | CEO Dennis Woodside: over half of its code now originates in AI | diginomica |
Around the time of Meta’s announcement, Microsoft confirmed it would offer voluntary buyouts for the first time in its history. According to a person familiar with the plans, about 7% of its roughly 125,000 US employees are eligible, which CNBC calculated at up to 8,750 people.
Warning signs at AI startups
The cases above share a few early signals. None of them guarantees a layoff, but each showed up before one.
Stalled funding or sale talks. AI21 Labs, valued at $1.4B in 2023, cut 110 of 180 staff after a year of sale talks that, according to Calcalist, ended in an acqui-hire-style arrangement with Nebius, which AI21 denies. Hailo’s cuts came after its SPAC merger stalled.
Founders leaving for a big tech company. Inflection, Adept, Character.AI, Windsurf, Scale AI and Groq all lost founders or senior leaders to big tech companies through license, investment or acquisition deals. Character.AI, Windsurf and Scale AI cut staff within weeks.
A product a platform can copy. Huxe and Relay built products that bigger companies later offered themselves.
A leadership exit. Stability AI laid off about 10% of staff a month after its CEO resigned.
Frequently asked questions
Which AI startups laid off staff in 2026?
2026 cases include AI21 Labs (110 of 180 staff, May) and Hailo (110 people, about half its staff, June). Darrow cut staff in July; Calcalist reported 60 of about 180, a figure Darrow has not confirmed. Yupp, Huxe, ClimateAi and Relay shut down, and Microsoft hired at least 18 former Robin AI employees as that company was broken up. The tracker table above lists dates, funding and sources.
How many tech layoffs have there been in 2026?
Layoffs.fyi counts 131,687 tech employees laid off across 318 companies in 2026 as of October 10, already above its 2025 total of 122,606. Challenger counted 165,925 announced US tech job cuts from January to September 2026, up 54% from the same period of 2025.
How many job cuts have been blamed on AI?
US employers cited AI as the reason for 120,136 announced job cuts from January to September 2026, about 21% of all cuts, according to Challenger, Gray & Christmas. That compares with 54,836 in all of 2025 and 4,247 in 2023.
Why did Scale AI lay off staff after Meta’s investment?
Scale AI cut about 200 employees, about 14% of staff, and ended work with 500 contractors in July 2025, weeks after Meta invested $14.3B and hired founder Alexandr Wang. Interim CEO Jason Droege wrote that the company had ramped up its generative AI capacity “too quickly,” per CNBC.
What is the difference between an acqui-hire and a layoff?
In a license-and-hire deal, a big tech company pays a license fee and hires the founders and key staff, while the startup keeps operating with the rest. Meta’s $14.3B investment in Scale AI worked in a similar way. The staff who leave are hired, not laid off, but cuts at the remaining company have followed within weeks at Character.AI and Scale AI, and at Windsurf after Cognition bought it.
Is AI replacing workers or is it an excuse?
Both happen. Freshworks says over half its code now originates in AI, and Block’s Jack Dorsey said AI tools let a smaller team do more. But Revelio Labs chief economist Lisa Simon has called AI “a little bit of a front and an excuse” for some cuts, and Klarna shrank partly through attrition after a hiring freeze rather than layoffs.
About the author
Editorial Staff
The Editorial Staff at Bot Memo is a team of writers, analysts, and AI agents dedicated to mapping the global AI startup ecosystem. Led by Chintan Zalani, the team tracks thousands of funding rounds, classifies companies across verticals, and distills it all into actionable intelligence for investors and founders.
