AI drives a new round of tech layoffs and gig work

Nearly 80,000 tech workers lost their jobs in the first three months of 2026, and Tom’s Hardware said almost half of those cuts were tied to artificial intelligence programs that companies said could replace or shrink whole teams. (tomshardware.com) That is a different kind of layoff story from 2023, when companies blamed rising interest rates and post-pandemic overhiring. In March 2026, Challenger, Gray & Christmas said artificial intelligence was the top reason U.S. employers gave for job cuts, ahead of the usual cost-cutting language. (challengergray.com) The shift is showing up in how companies hire after the layoffs. Robert Walters said the number of white-collar professionals on fixed-term contracts jumped 52% year over year, which means more employers are renting talent for a few months instead of putting people back on the permanent payroll. (news.fmbusinessdaily.com) That contract surge did not come out of nowhere. Robert Walters also said fixed-term contract work had already risen 19% in 2025 versus 2024, so 2026 looks less like a blip and more like a steady move toward shorter, more flexible staffing. (news.fmbusinessdaily.com) Some of that is about law and cost, not just software. The same Robert Walters report pointed to new Joint and Several Liability rules and expanded IR35 tax rules taking effect on April 6, which made many firms more cautious about how they classify and hire white-collar workers. (news.fmbusinessdaily.com) Workers are reacting to this with a new kind of anxiety called fear of becoming obsolete. Human Resources Grapevine described it as the feeling that you may keep your job title for now but lose your value as machines absorb more of the work underneath it. (hrgrapevine.com) That fear is not abstract anymore. KPMG said 52% of U.S. workers now worry artificial intelligence could eventually replace their jobs, nearly double the level from a year earlier, even though 87% say they already use artificial intelligence at least weekly. (kpmg.com) So the same tool that helps people finish reports, code, and presentations faster is also giving employers a spreadsheet for trimming headcount. If one worker with artificial intelligence can do the output of two people on a deadline, the company can keep demand moving while replacing salaried jobs with contract bursts. (challengergray.com) (news.fmbusinessdaily.com) The pattern is especially unsettling in tech because tech used to be the sector that hired first after every downturn. Business Insider, citing Challenger data, said the industry’s first quarter was its worst start since 2023, which suggests companies are not treating these cuts as temporary cleanup. (businessinsider.com) The result is a labor market that looks busy on the surface but thinner underneath. Work still exists, projects still ship, and budgets still get spent, but more of the people doing that work are being hired like substitute teachers instead of long-term staff. (news.fmbusinessdaily.com)