Tech layoffs are rising and one reason many companies often mention is the shift towards AI and agentic AI tools. According to data from Layoffs.fyi, over 92,000 tech employees have already lost their jobs in 2026 across nearly 100 companies. This pace is much faster than last year. The idea is simple -- use AI to do more work with fewer people. However, a new report now suggests that the reality is not that simple. In many cases, companies are now spending more on AI than on employees.
AI tools are used for coding, data work and daily tasks. Many engineers run several AI tools together to work faster. This helps them do more work but it also increases costs. Every time AI is used, it costs money. Each request made to these systems comes at a cost, often measured in 'tokens'.
If used too aggressively, the total cost can become very high.
Speaking toAxios, Bryan Catanzaro from Nvidia said that the cost of using AI for his team has already gone beyond what the company spends on employees
“For my team, the cost of compute is far beyond the costs of the employees,” Catanzaro, vice president of applied deep learning at Nvidia, said.
This shows how expensive large-scale AI usage can become.
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At Meta, employees are even being evaluated based on how much they use AI tools.
According to a report from The New York Times, dome workers are also overusing these tools. There is even a trend called 'tokenmaxxing”' where engineers use large amounts of AI just to push limits. In some cases, monthly AI bills have crossed $150,000, which is higher than usual salaries.
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