The headlines say the job market is holding steady. But the devil is in the details.

Quiet buyouts, strategic tech layoffs, and hiring freezes are sweeping through some of the world’s most profitable companies. 

The signs are pointing towards a new type of corporate operating model, and artificial intelligence is at the center of it.

Why are companies cutting jobs in a growing economy?

Since early 2025, companies like Google, Microsoft, Amazon, and Procter & Gamble have eliminated thousands of jobs. 

The pattern is not limited to one sector. Cybersecurity firms, education platforms, retail giants, and media companies are all doing the same.

Most reports cite “cost-cutting” or “efficiency.” But the macro data doesn’t fully support that narrative.

The US labor market appears stable. April jobs data beat expectations. Inflation has cooled. Yet corporate layoffs continue in waves. 

The same pattern is visible in China, where job fairs for new graduates are oversaturated and automation is growing fast in marketing and software engineering.

This is not a cyclical pullback. It’s a structural adjustment.

The economic pressure from tariffs is part of it, especially after President Trump’s trade policies resumed in 2025, raising import costs and prompting new rounds of price hikes. 

But the deeper force is the rise of enterprise-level AI. And it’s real. Companies are not just experimenting with AI.

They’re redesigning entire departments around it.

AI isn’t taking jobs – it’s replacing departments

Google has spent over $75 billion this year on AI infrastructure, according to the Wall Street Journal.

That includes the development of “AI Mode” for search, a restructuring of internal learning tools, and massive capital outlays across engineering and research.

To fund this shift, the company has quietly offered voluntary buyouts across Search, Ads, HR, Legal, and Communications. 

Executives have framed it as a “supportive exit path,” especially for those not aligned with the company’s new direction.

In reality, it is a managed transition toward an AI-first workforce.

Microsoft has followed a similar pattern. In May, it eliminated 6,000 positions across all divisions, unrelated to performance, with the stated goal of removing management layers. 

Klarna cut 40% of its workforce after AI replaced over 700 customer service agents. 

Shopify now requires teams to justify why a job can’t be automated before they can make a new hire.

Salesforce says internal AI tools have reduced the need to hire more engineers and customer service staff, allowing the company to save $50 million this year by redeploying hundreds of roles instead of expanding headcount.

Meta is also in the middle of a sweeping AI overhaul.

The company plans to spend up to $72 billion this year to automate internal systems, replace human-led reviews, and fully transform its advertising business with generative tools. 

At Meta, everything from privacy checks to campaign creation is being rebuilt through AI to lower costs and reduce reliance on outside agencies.

In China, the situation is more public. Meituan reported that 52% of new code in May was generated by AI, up from 27% just two months earlier. 

Zhou Hongyi, founder of 360 Security, announced he plans to eliminate the entire marketing department and use generative AI tools to handle communications. He claims it will save “tens of millions per year.”

This is not about saving a few percentage points on headcount. It’s about rebalancing how work gets done.

White-collar work is no longer the default entry point

AI adoption is creating a new labor bottleneck, especially at the entry level.

Job cuts are not just reducing teams. They are removing the traditional onboarding ramp for young professionals.

March and April job growth in the US was revised down by 95,000 positions. 

According to ADP, private-sector hiring hit its lowest level in over two years. 

New graduates are finding it harder to enter the job market.

At the same time, internal mobility is slowing, with incumbent employees choosing to stay put.

In China, the Ministry of Finance has allocated nearly $9.3 billion in employment subsidies, and a new pilot program is testing robots for elderly care.

But the cultural and structural issues run deeper.

Competition remains extreme, overtime is normalized, and many college graduates are turning to livestream selling or gig work in the absence of stable employment.

In both countries, the message is clear: if you don’t know how to use AI, your job prospects are limited.

Employers are no longer willing to train from scratch. They expect AI fluency up front.

Are buyouts the new tech layoffs?

Since early 2024, Google has changed its downsizing strategy from mass layoffs to voluntary exit programs. 

In January 2023, the company faced backlash for cutting off access to internal systems without warning.

Since then, it has offered buyouts across hardware, HR, legal, and now search.

The same offers now come with office mandates. Remote workers living within 50 miles of a Google office are required to return on a hybrid basis.

Those unwilling to do so are subtly encouraged to take the buyout.

This trend is not unique to Google. Across the tech sector, return-to-office policies now serve as filters.

They allow companies to reduce headcount without direct termination. 

The result is a cleaner exit path, especially for mid-level employees misaligned with new performance expectations.

This shows that work-from-anywhere flexibility is no longer considered a baseline perk. It’s a variable in cost analysis.

What comes next?

The first clear sign of the next phase is the disappearance of entry-level white-collar jobs.

These roles are being absorbed by software, outsourced, or removed altogether. 

New hires will be fewer, and those who remain will be expected to integrate AI tools into their daily workflows.

Anthropic CEO Dario Amodei has warned that AI could eliminate 50% of entry-level white-collar jobs in the next five years.

He predicts unemployment could reach 10-20% unless governments intervene. He proposed a “token tax” on large AI models to help redistribute productivity gains.

Meanwhile, in both the US and China, labor policies have not caught up. The conversation is still about reskilling and subsidy programs. 

But the deeper issue is that the structure of employment itself is changing.

We are moving toward a world where productivity does not require people in the same way it used to.

AI is not just a tool. It’s becoming the template. And tech companies are rushing to adopt it.

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Gold prices are on track to reclaim record highs as positive bias continued to support sentiments, experts said. 

Following widespread Israeli strikes on Iran, escalating geopolitical tensions in the Middle East fueled safe-haven demand, pushing gold prices to nearly a two-month high on Friday.

Israel initiated extensive strikes against Iran, targeting nuclear facilities, ballistic missile factories, and military commanders. 

This action, described as the beginning of a sustained operation, has reignited conflict in the Middle East, with Israel asserting its aim to prevent Tehran from developing an atomic weapon.

Meanwhile, Iran has responded by launching a swarm of drones towards Israel on Friday, according to an Al Jazeera report.

On Friday, the price of gold continued its bullish trend for the third consecutive day, nearing its highest level since April 22 during the first half of the European session.

The most-active gold contract on COMEX hit $3,466.75 an ounce earlier on Friday, its highest level since April 22, when prices had breached the $3,500 for the first time ever. 

Increasing safe-haven demand has helped gold prices climb sharply over the last couple of sessions. 

“Against the backdrop of trade-related uncertainties, a further escalation of geopolitical tensions in the Middle East tempers investors’ appetite for riskier assets,” Haresh Menghani, editor at FXStreet, said in a report. 

This, in turn, boosts demand for traditional safe-haven assets, including the yellow metal.

Additionally, the European Central Bank highlighted the significant role of central banks in the gold market, noting that they have been responsible for approximately 20% of global gold purchases over the past three years.

Tensions escalate

US President Donald Trump’s trade policies have already created market uncertainty, and now rising tensions are adding another layer of complexity in the bullion market. 

According to Geojit Investments, bullish momentum is likely to continue in gold as safe-haven demand remains high. 

Meanwhile, Prime Minister Benjamin Netanyahu of Israel announced that the ongoing operation is aimed at Iran’s nuclear program and will persist until the threat is neutralised. 

Israel has also declared a state of emergency, anticipating potential retaliatory actions from Iran in response to the operation.

Ayatollah Ali Khamenei, Iran’s Supreme Leader, vowed severe punishment for what he termed a crime, stating that Israel has sealed its own bitter fate with this attack.

Menghani said:

This raises the risk of a region-wide and more devastating war, weighing on investors’ sentiment.

UBS, Commerzbank see higher prices for gold

According to UBS, gold prices have remained relatively stable between $3,200 and $3,400 per ounce since mid-April. 

This stability held despite recent modest ETF outflows and profit-taking by money managers.

Notable deviations include temporary surges above $3,500 on April 22 and declines below $3,120 on May 15.

UBS expects the precious metal to retest the $3,500 per ounce level as inflows resume, according to an Investing.com report. 

The firm maintains a bullish stance on gold prices, anticipating renewed buying interest in the market over the coming months.

Investors are increasingly adopting a long-term, strategic approach to gold, recognising its value as a portfolio diversifier rather than solely a short-term geopolitical hedge.

This shift in perspective is evident among both institutional and retail investors.

For investors with a preference for gold, UBS recommends a mid-single-digit allocation within a balanced portfolio.

The firm’s global asset allocation strategy includes a sustained long position in gold.

Barbara Lambrecht, commodity analyst at Commerzbank AG, said on Friday:

Gold remains in demand as a safe haven. 

The German bank now sees gold prices averaging $3,400 an ounce by the end of this year and $3,600 an ounce by the end of 2026.

Gold to retest all-time peak

Over the last month, the market has seen an upward trend, moving within an ascending channel. 

“This points to a well-established short-term uptrend, which, along with the fact that oscillators on the daily chart are holding in bullish territory, validates the near-term positive outlook for the gold price,” Menghani said.

“Hence, a subsequent move towards challenging the all-time peak, around the $3,500 psychological mark touched in April, looks like a distinct possibility.”

Conversely, any downward correction could present a buying opportunity, with strong support anticipated around the $3,400 level.

Should selling continue below the $3,385 mark, further losses are anticipated, targeting the $3,355 intermediate support, according to FXStreet. 

This could lead to a decline towards the $3,330-$3,329 region, which signifies the lower boundary of the ascending channel.

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The relationship between tech billionaire Elon Musk and President Donald Trump took a contentious twist, casting uncertainty over SpaceX’s involvement in a critical US missile defense initiative known as the ‘Golden Dome.’

A report from news agency Reuters indicates that the feud, which erupted publicly last week, has led to questions about whether SpaceX, Musk’s aerospace company, will maintain its anticipated role in this ambitious defence project.

The Golden Dome missile defense project

The ‘Golden Dome’ is an advanced missile defense system proposed by the Trump administration, aimed at enhancing the United States’ ability to track and intercept potential missile threats through a network of satellites and cutting-edge technology.

SpaceX was reportedly slated to play a pivotal role in this initiative, collaborating with companies like Palantir and Anduril to develop key components of the system.

The project, seen as a cornerstone of Trump’s defense strategy, relies heavily on private sector innovation, with SpaceX’s expertise in satellite deployment and rocket technology considered integral to its success.

SpaceX had submitted a proposal for the “custody layer” of the Golden Dome initiative — a satellite constellation of 400 to 1,000 units designed to detect missile launches, track their trajectories, and assess whether they pose a threat to US territory, according to an April report by Reuters.

The pitch came in the wake of a January 27 executive order from President Donald Trump, which directed officials to finalize a proposed architecture for the Golden Dome and deliver an implementation plan by the end of March.

However, the recent clash between Musk and Trump has thrown this collaboration into doubt.

Impact of the feud on SpaceX’s role

The US government is now reconsidering SpaceX’s involvement in the Golden Dome project.

The report citing sources suggests that a reduced role for SpaceX could mark the first significant setback to Musk’s extensive business dealings with federal agencies since the feud began.

The White House, which had previously prioritized SpaceX’s contributions to the missile shield, is exploring alternative frameworks that might limit the company’s participation.

This development raises questions about whether other defense contractors could step in to fill the gap, potentially altering the project’s timeline and technological approach.

The uncertainty surrounding SpaceX’s role in the Golden Dome project extends beyond a mere corporate dispute.

SpaceX has been a linchpin in US space endeavors, not only through its contributions to missile defense but also via its contracts for missions to the International Space Station and the development of the Starship program.

A diminished partnership with the government could disrupt critical defense initiatives at a time when global tensions necessitate robust missile tracking systems.

In recent days, Elon Musk has moved to de-escalate tensions with former President Donald Trump, expressing regret over some of his earlier remarks and deleting social media posts that included calls for Trump’s impeachment.

Earlier this week, White House Press Secretary Karoline Leavitt told reporters that Trump appreciated Musk’s apology and that she was not aware of any administration review of federal contracts involving Musk as a result of the dispute.

Disclaimer: Portions of this article were generated with the assistance of AI tools and reviewed by the Invezz editorial team for accuracy and adherence to our standards.

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Brazil’s service sector grew for the third straight month in April, fueled in part by strong transport demand associated with Lady Gaga’s giant concert in Rio de Janeiro, the national statistics agency IBGE said Friday.

Gaga’s free show on Copacabana Beach on May 3 that attracted an estimated 2.1 million fans appears to have had a preliminary effect on the economy, via travel and ticket purchases made in advance.

IBGE said that, despite the event taking place in May, the preparation for the show probably affected the April numbers.

The services sector grew by 0.2% month-on-month in April, continuing to show resilience despite Brazil´s high interest rates, which are stuck near a 20-year high of 14.75%.

The sector saw a 1.8% rise year on year, which was about in line with economists’ expectations.

Concert crowds drive travel surge

The transportation industry stood out as a major contributor to April’s growth, rising by 0.5% month on month.

It was the only one of the five major service groups tracked by IBGE to produce a positive result over the period.

Airlines and travel providers had earlier reported an increase in bookings due to the concert, resulting in additional flights and near-capacity operations at Rio de Janeiro’s principal airports.

The rush of domestic and international tourists, many of whom planned their journeys weeks, boosted demand for air travel, road transportation, and logistics services.

IBGE observed that concert-related purchases, such as travel and lodging, were most likely made in April, influencing the sector’s performance.

The agency also mentioned that Brazil’s national holiday on May 1 may have prompted early travel and spending.

Mega-events support local economies

The concert was billed by Rio’s city government as part of its wider strategy of attracting big international names to perform for free, in front of the public.

Local authorities state that events of this scale generate significant income for local businesses, including hospitality, tourism, and transport.

It isn’t the first time a foreign pop tour has had detectable economic impacts in Brazil.

In December, IBGE recorded a similar spike in services associated with Taylor Swift’s six-show “Eras Tour” across large Brazilian cities that prompted a national travel and spending frenzy.

These events are high-profile and are a tangible offset to some of the macroeconomic forces currently grappling Brazil.

Despite slowing GDP growth and increasing borrowing costs, the economy’s largest sector, services, remains strong.

The outlook remains cautious amid high rates

Despite the excellent April numbers, Brazil’s overall economic outlook remains cautious.

With the central bank’s benchmark interest rate of 14.75%, financing costs continue to hinder growth in consumer consumption and investment.

Nonetheless, the ongoing development in services, notably in transportation and tourism-related sub-sectors, demonstrates the enduring relevance of non-structural drivers such as large-scale cultural events.

These can provide a short-term stimulus and assist in offsetting stagnation in other sections of the economy.

The latest IBGE analysis highlights how entertainment and travel demand, even before the event dates, can have a direct impact on economic indices.

While April’s overall expansion was modest, it represented a consistent trend that could carry forward into future months if comparable events occur.

As Brazil enters the winter season and additional concerts and festivals are planned in key cities, observers will be looking to see if the service industry can maintain its upward trend despite ongoing monetary tightening.

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Travel and leisure stocks bore the brunt of investor anxiety on Friday after Israel launched airstrikes on Iranian targets, stoking fears of an escalating conflict in the Middle East.

The strikes, aimed at crippling Iran’s nuclear infrastructure, rattled global markets and sent oil prices surging, sparking a classic flight to safety.

The S&P 500 Index dropped 0.5% in trading as investors retreated from risk.

Meanwhile, safe-haven assets such as US Treasuries and gold advanced sharply, with crude oil notching its biggest intraday gain since 2020.

American Airlines, United Airlines, fall on fears of tepid travel demand

Fears that a prolonged conflict could weigh on fuel costs and dampen global travel demand pushed airline and cruise stocks lower.

Shares of American Airlines Group Inc. and United Airlines Holdings Inc. led losses within the travel sector, dragging down the S&P index of airline stocks.

United, which suspended flights between Newark and Tel Aviv, added to investor concerns over route disruptions and rising fuel prices.

“All travel stocks with a global footprint react negatively to heightened geopolitical tensions,” said Robert W. Baird & Co. analyst Michael Bellisario in a Bloomberg report.

“Consumer sentiment and cross-border demand could be negatively impacted by the recent events in the Middle East and the associated negative headlines.”

Cruise operator Carnival Corp. fell 4.4%, while Expedia Group Inc. lost 2%.

An S&P gauge tracking travel booking platforms, cruise lines, and hotels is on pace for its worst weekly decline in over two months, having fallen for five straight sessions.

Oil rally boosts energy and defense stocks: Diamondback, Halliburton gain

In contrast, energy shares rallied as oil surged on fears of supply disruptions.

Diamondback Energy Inc. rose nearly 3%, while oilfield services firm Halliburton Co. gained about 4%.

Industry majors Exxon Mobil Corp. and Chevron Corp. also advanced as traders priced in risk premiums to oil.

The path forward for oil remains uncertain.

“Crude’s ultimate landing point will likely hinge on whether Iran revives the 2019 playbook and targets tankers, pipelines, and key energy facilities across the region,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

Citigroup Inc. analyst Spiro Dounis, however, warned investors not to overreact, noting the “low risk of physical disruption” and predicting that bearish fundamentals could eventually weigh oil back down.

Defense and shipping firms see gains on military and logistics concerns

With Israel suggesting further strikes may follow, shares of US defense contractors also gained.

Lockheed Martin Corp. rose as much as 4.1%, while Northrop Grumman Corp. climbed 3.7%, as markets anticipated a rise in defense spending.

Shipping firms also benefited from the risk of conflict-related disruptions.

ZIM Integrated Shipping Services Ltd. advanced amid expectations that container freight rates could rise as vessels avoid the region and reroute around Africa.

Gold miners like Newmont Corp. also saw gains on the back of a rising gold price.

Caution prevails despite sharp market moves

Despite the swift market reaction, some analysts urged restraint.

“The response was traditionally risk off,” said Mark Hackett, chief market strategist at Nationwide.

“Still, the long-term impact of geopolitical events is usually limited in markets.”

“The impact is impossible to accurately calculate,” he added. “If the last three months have taught us anything, it is wise to wait for more information rather than emotionally react.”

With explosions reported near Tehran, Natanz, and other cities, and senior Iranian military figures reportedly killed, tensions are at their highest point in months.

Israeli Prime Minister Benjamin Netanyahu hinted at continued military operations, while former US President Donald Trump called on Iran to accept a nuclear deal “before it is too late.”

Markets are likely to remain volatile in the near term, as investors grapple with geopolitical uncertainty, energy market dynamics, and the prospect of a broader regional conflict.

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