Companies roll out sweeping job cuts as AI and cost pressure reshape staffing

Companies and governments are stepping on the brakes

Talk of workforce reductions is back in force, with October mentions hitting the highest level since May, according to Bloomberg's tracking. Even governments are exploring AI to shrink payrolls and cut costs.

The latest wave spans media and autos. Walt Disney is preparing to slash jobs by the thousands ahead of results due later this month. Germany's Schaeffler said Tuesday it will eliminate 3,460 positions in Europe, nudging its shares lower.

Volvo Car announced it will scale up layoffs due to a vanishing market in China, affecting 2,500 workers and sending the stock plunging. French supplier OPmobility reduced its full year earnings forecast and plans to cut 770 jobs, triggering its steepest drop in three years.

Tech and finance are trimming too. Microsoft is offering buyout packages to 60,000 workers, roughly a quarter of its workforce. Netflix is reducing numbers by 6%. Barclays is cutting 5,000 jobs to lower costs through AI.

How markets are reacting

Investors are distinguishing between proactive pruning and emergency surgery. Chris Armstrong, stock strategist at Berenberg, said, "The share price reaction very much depends on whether the market thinks it's coming from a position of strength, or whether, as was the case with Volvo, where they're coming from a position where they're under a lot of pressure."

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That split showed up in prices. PayPal and Microsoft ticked higher after setting out their plans. PayPal said its headcount is down by more than 2,000 and that management roles have been reduced by more than a quarter. Volvo Car and OPmobility sold off hard.

The broader cycle and the AI promise

For Joachim Klement of Panmure Liberum, this wave signals that the post Covid and high inflation era of rapid revenue and earnings growth is fading, with more subdued profit expansion likely in 2027 and 2028. "The low-hanging fruit have been picked and costs are harder to cut going forward," he said.

Governments are betting on AI efficiencies too. The Netherlands plans to reduce 25,000 civil servant roles over the coming years, targeting yearly savings of €3.5 billion, or $3.9 billion, through an AI-driven efficiency push.

The scale and what it means for your portfolio

This earnings season, S&P 500 announcements of broader restructurings are on course to be about 20% higher than a year ago, per Bloomberg data. With roughly 70% of the index having reported, restructuring charges have been announced by 147 companies so far, versus 178 for the whole third-quarter earnings season in 2025. Across MSCI Europe, companies look set to match the 60 restructurings reported a year earlier, with the broader pace similar to last year.

The bottom line: cuts aimed at productivity and reinvestment can support margins over time, while reductions that plug demand holes often arrive alongside weaker revenue.

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