Big Tech pours billions into AI while thousands pack their bags
This week saw Big Tech announce its results for the March quarter of 2026. The latest round of earnings from Silicon Valley royalty paints the picture of an industry in the middle of a significant and costly transformation.
Revenue was up across the board. Amazon, Meta, Microsoft, and Alphabet all topped Wall Street forecasts on Wednesday. Amazon reported net sales of $181.5 billion, up 17% on-year. Microsoft's revenues came in at $82.89 billion, up 18%. Meta and Alphabet also beat analyst estimates, with Alphabet boosted in part by strong cloud growth. The Google parent's total revenue rose 22% to $109.9 billion in the first quarter.
But what caught the attention of investors was the record projected capital expenditure on artificial intelligence (AI), similar to last quarter, where one tech giant attempted to outdo the other, even as they planned to axe tens of thousands of jobs.
AI spends dialled up
Meta raised its 2026 capex guidance to between $125 and $145 billion, citing higher component costs and expanded data centre capacity for AI workloads.
Across the four hyperscalers — Alphabet, Meta, Amazon, Microsoft — projected spending in 2026 for AI now stands at $674 billion, more than double their 2024 levels.
The heavy outlays made investors cautious. Meta's shares fell 6% in after-hours trading following its updated guidance, while Microsoft and Amazon also slipped on concerns about AI buildout costs. Alphabet was the only gainer, lifted by its cloud strength. It added about $420 billion in market value in a single day, coming close to dethroning Nvidia as the world's most valuable company.
Layoffs rise in parallel
The conflicting nature of these commitments is highlighted by the same companies reducing their headcount. Meta has announced plans to cut approximately 8,000 jobs, or 10% of its workforce, while Microsoft has initiated a voluntary retirement program targeting a portion of its US employees.
This follows Amazon's announcement earlier this year of its most widespread layoffs to date, with 30,000 jobs at risk.
As of this week, over 90,000 tech workers have been laid off in 2026, according to Layoffs.fyi. Oracle and Snap have also let go in scores, while Block almost halved its staff.
Analysts have flagged the restructuring as a sign of tighter cost discipline running in parallel with sustained AI investment, with companies redirecting savings from workforce reductions towards infrastructure spending.
Revenue was up across the board. Amazon, Meta, Microsoft, and Alphabet all topped Wall Street forecasts on Wednesday. Amazon reported net sales of $181.5 billion, up 17% on-year. Microsoft's revenues came in at $82.89 billion, up 18%. Meta and Alphabet also beat analyst estimates, with Alphabet boosted in part by strong cloud growth. The Google parent's total revenue rose 22% to $109.9 billion in the first quarter.
But what caught the attention of investors was the record projected capital expenditure on artificial intelligence (AI), similar to last quarter, where one tech giant attempted to outdo the other, even as they planned to axe tens of thousands of jobs.
AI spends dialled up
Meta raised its 2026 capex guidance to between $125 and $145 billion, citing higher component costs and expanded data centre capacity for AI workloads.
Across the four hyperscalers — Alphabet, Meta, Amazon, Microsoft — projected spending in 2026 for AI now stands at $674 billion, more than double their 2024 levels.
The heavy outlays made investors cautious. Meta's shares fell 6% in after-hours trading following its updated guidance, while Microsoft and Amazon also slipped on concerns about AI buildout costs. Alphabet was the only gainer, lifted by its cloud strength. It added about $420 billion in market value in a single day, coming close to dethroning Nvidia as the world's most valuable company.
Layoffs rise in parallel
The conflicting nature of these commitments is highlighted by the same companies reducing their headcount. Meta has announced plans to cut approximately 8,000 jobs, or 10% of its workforce, while Microsoft has initiated a voluntary retirement program targeting a portion of its US employees.
This follows Amazon's announcement earlier this year of its most widespread layoffs to date, with 30,000 jobs at risk.
As of this week, over 90,000 tech workers have been laid off in 2026, according to Layoffs.fyi. Oracle and Snap have also let go in scores, while Block almost halved its staff.
Analysts have flagged the restructuring as a sign of tighter cost discipline running in parallel with sustained AI investment, with companies redirecting savings from workforce reductions towards infrastructure spending.
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