Hedge funds trim tech after layoffs
- Hedge funds used last week’s stock rally to cut risk, while Meta confirmed 8,000 layoffs and Microsoft launched its first employee buyout program. - Goldman said U.S. long-short gross leverage fell 4.6 points last week, the sharpest de-grossing in seven months, led by single-stock selling. - Tech layoffs now coincide with heavier AI spending, not retrenchment alone. (cnbc.com)
Hedge funds spent last week cutting risk in U.S. equities even as the S&P 500 pushed to a record, and tech was a main source of selling. (bloomberg.com) Goldman Sachs prime brokerage data showed U.S. long-short gross leverage fell 4.6 percentage points, the biggest de-grossing move in seven months. The bank said the unwind was led by single stocks. (bloomberg.com) That pullback landed as two of the market’s biggest artificial intelligence spenders moved to cut labor costs. Meta said it will eliminate about 10% of its workforce, or roughly 8,000 jobs, and scrap 6,000 open roles. (cnbc.com) Meta’s cuts are set to begin on May 20, with more layoffs expected later in 2026, according to Reuters. The company is redirecting money toward artificial intelligence infrastructure and hiring for higher-paid AI roles. (finance.yahoo.com) (cnbc.com) Microsoft took a different route on April 23, offering voluntary buyouts for the first time in its 51-year history. The program applies to some U.S. employees, with eligibility tied to age and years of service. (cnbc.com) The company had already frozen hiring in parts of its cloud and North American sales groups in March, while keeping hiring open in divisions working on Copilot. Reuters said Microsoft was trying to cut costs and protect margins as artificial intelligence spending climbed. (usnews.com) The timing matters because these cuts are arriving during a market rebound, not a broad tech crash. Funds are reducing exposure while the biggest platform companies keep pouring cash into data centers, chips and AI products. (bloomberg.com) (cnbc.com) CNBC reported that more than 92,000 tech workers had been laid off in 2026 as of last week, citing Layoffs.fyi. That count puts the Meta and Microsoft moves inside a wider labor reset tied to both overhiring and automation. (cnbc.com) For investors, the signal is less about one bad earnings week than about how AI-era restructuring is being financed. Companies are still spending aggressively to build AI capacity, and funds are deciding which parts of that trade they still want to own. (cnbc.com) (bloomberg.com)
