The world of software-based product development — at least in Big Tech — is chaotic of late. “In early 2025, tech layoffs are not only happening at a rapid clip, but these cuts are also getting ‘uglier.'” Yet according to a recent poll on the professional network Blind, most respondents (over 90% — 324 v. 33 as of the afternoon of February 4) agreed with that descriptor of the recent waves of cuts rocking Google, Meta, Amazon, and Microsoft.
Performance-based purges
Many large tech companies staffed up aggressively during the pandemic, expecting permanent growth in remote work, e-commerce, and digital services. As macroeconomic conditions shifted, those same companies sought to trim headcount. What stands out in 2025 is how some firms, instead of calling their cuts “layoffs,” are using words like “performance-based” or noting that their workers are “not meeting minimum requirements.” Labeling an employee as “low-performer” or part of the “bottom 10%” can be a tactic to reduce severance obligations or skirt certain legal requirements (such as WARN Act notices in the U.S.). It also allows leaders to blame the employee, rather than accept responsibility for broader cost-cutting strategies. Multiple Blind users note that this is happening even at companies that, a year ago, seemed flush with cash and eager to hire.
[Related: 2025 R&D layoffs tracker]
Against that backdrop, companies like Meta and Google also note that an increasing share of their software is being written by AI rather than humans. Meta CEO Mark Zuckerberg has projected that this year, AI systems could potentially do the work of a mid-level software engineer. For the time being, humans are still in control in most software development, though the expectations around productivity are clearly shifting.
Early signals: Twitter’s deep cuts in 2022
After Elon Musk’s $44 billion acquisition of Twitter in October 2022, the company initiated massive layoffs as part of an aggressive cost-cutting strategy. The initial wave occurred on November 4, 2022, just days after Musk took control, ultimately slashing about 50% of Twitter’s roughly 7,500-person workforce. Musk cited mounting financial challenges, including a $3 billion negative cash flow, as justification. While laid-off employees were promised three months of severance, it provoked class-action lawsuits alleging WARN Act violations. By April 2023, Twitter’s headcount had dropped to around 1,500, marking a reduction of nearly 80%.
Why tech workers think layoffs are ‘uglier’
As noted above, many in the tech community see these layoffs as increasingly harsh for a few key reasons. First, stigma for the departing can be severe; being labeled as part of a “bottom 10%” taints a person’s professional reputation, even when the real driver is headcount reduction. Then there’s the issue of sudden or no severance, where some employees report losing access to internal systems without warning and leaving with little to no financial cushion, all under the guise of “performance” concerns. Finally, a culture of fear can take hold among those left behind, as they worry they could be next; this dynamic quickly erodes trust between management and staff—something especially corrosive in an industry that relies on creative collaboration and high morale.
Parallel layoff patterns in finance and consulting
Recent data shows that performance-based staff reductions aren’t confined to Big Tech. Although not R&D-heavy fields in the traditional sense, financial services firms like Goldman Sachs initiated cuts by singling out the bottom 3–4% of employees in 2024. Other major banks also engage in similar practices to manage costs and optimize performance. Financial services firms, however, especially those in the Russell 3000 index, often offer generous severance payouts.
Consulting giants, meanwhile, are under pressure to reduce costs as clients scrutinize spending. Several have used year-end performance reviews to justify letting go of lower-billing or “underutilized” consultants. While some firms provide structured severance or notice periods, the reputational harm of being flagged for underperformance remains high—similar to what Big Tech employees experience when labeled part of the “bottom 10%.”
Why this matters to R&D teams
Even R&D-focused tech employees may find themselves competing with experienced financial-services or consulting professionals who face layoffs and then pivot into tech or AI-driven roles. As more traditional firms (banks, consultancies) adopt advanced technologies, the line between “tech” and “finance/consulting” blurs. Layoff practices in one sector can spill over into others.
Meanwhile, on the public sector side, the National Science Foundation may soon implement “mass layoffs” that could affect up to half its staff. As Politico reports, citing a spokesperson, the “large-scale reduction” is “in response to the President’s workforce executive orders,” and is “already happening.”
The NSF isn’t the only federal agency in the crosshairs. President-elect Donald Trump has created a new commission—dubbed the Department of Government Efficiency (DOGE)—led by Elon Musk that aims to cut $500 billion or more in annual federal spending through agency consolidations, stricter return-to-office policies, and large-scale layoffs that mirror Musk’s aggressive cost-cutting at Twitter/X.
In short, while Big Tech has grabbed headlines for harsh performance-based cuts, these cost-reduction measures are now surfacing across diverse sectors.
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