The new-age AI explosion has caused big tech companies to re-evaluate billion-dollar investments into the very advancement heavily attributed to this year’s surging layoffs. Even as the “cost of AI” outweighing human employees (an issue raised by Microsoft and Uber in recent reports) has come to light, the conversation’s focus remains on a tech tool that doesn’t physically exist.
This has further stolen the spotlight from actual workers who already lost their jobs to sweeping layoffs announced by their tech companies, trying to keep up in a competitive AI-first world. At a time like this, a new survey redirected attention toward people severely impacted by the 100,000+ tech layoffs so far this year, revealing that a laid-off software engineer suffers a financial blow of over $14,000 a month.
Survey reveals how tech layoffs cost workers
On May 26, the insurance comparison website Insuranceopedia released its analysis titled “Losing a Tech Job Now Costs Workers Nearly $4,000 More Per Month Than Five Years Ago.” Key takeaways determined that losing a tech job now costs workers nearly $14,400 per month, up 36% from 2021 and 57% from a decade ago. This also includes an average salary of $13,750 and $625 in private health insurance costs.
According to real-time tech layoff tracker Layoffs.fyi, 115,907 tech employees have been fired across 159 tech companies in 2026 as of this week. Insuranceopedia’s research similarly accounts for roughly 115,000 employees, noting that the figure matched last year’s full-year layoff count.
Losing a tech job costs workers nearly $4,000 more per month than it did just five years ago, according to the study released on May 26, which also sources figures from the US Bureau of Labor Statistics Occupational Employment and Wage Statistics database. “The analysis also included benchmark ACA marketplace premiums sourced from KFF, because many laid-off tech workers also lose employer-sponsored health insurance, forcing them to suddenly cover expensive private healthcare costs out of pocket,” the survey states further.
Even after adjusting older figures to the US dollar in 2026, the estimated monthly financial hit of losing a tech job still increased by $1,250 or 9.5%, rising from roughly $13,100 in 2021 to nearly $14,400 in 2026. Compared to a decade ago, the inflation-adjusted monthly financial impact of losing a tech job increased by roughly $1,600 or nearly 13%.
The study also points out that before and during the COVID-19 pandemic, the “main driver of the growing financial shock of layoffs” was rising health insurance costs, climbing 51% between 2016 and 2021. Conversely, the average monthly pay increased by only 13% at the time, according to Insuranceopedia. Even after 2021, wages and healthcare costs continued surging, rising 36% and 38% over the past five years, respectively.
Using AI is more expensive than hiring people: New data
Although AI was originally introduced into the tech workforce to speed up productivity gains and possibly even cut work hours among employees, recent research and reports indicate otherwise.
According to a report by The Verge, Microsoft started cancelling most of its direct Claude Code licenses, urging engineers to use GitHub Copilot CLI instead, despite pushing thousands of developers to use the Anthropic tool daily since December. One factor reportedly fuelling the switch and the cancellation of Claude Code licenses was the need to cut operating expenses with the new financial year starting in July.
“When we began offering both Copilot CLI and Claude Code, our goal was to learn quickly, benchmark the tools in real engineering workflows, and understand what best supported our teams,” said Rajesh Jha, executive vice president of Microsoft’s experiences and devices group, in an internal memo obtained by The Verge’s Notepad. “Claude Code was an important part of that learning… at the same time, Copilot CLI has given us something especially important: a product we can help shape directly with GitHub for Microsoft’s repos, workflows, security expectations, and engineering needs.”
In addition to Microsoft making the unexpected transition, Uber’s CTO Praveen Neppalli Naga told The Information in April that the company had already exhausted its entire AI coding tools budget for the year in just four months.
Similarly, Bryan Catanzaro, vice president of applied deep learning at Nvidia, told Axios, “For my team, the cost of compute is far beyond the costs of the employees.”
Despite Corporate America speaking out against skyrocketing AI-associated costs, Nvidia’s billionaire CEO Jensen Huang still chose to take a stand against other CEOs blaming artificial intelligence for the recent wave of layoffs. In an interview with Channel NewsAsia (CNA) earlier this month, he said, “I think the narrative that connects AI to job loss for many of the CEOs that are doing it…it is just too lazy.”
Asking “AI has just arrived. How is it possible they’re already losing jobs,” he said it “doesn’t make any sense” for companies to play the blame game. “How is it possible that AI became productive and useful only six months ago, and they were somehow laying people off two years ago because of AI?”
Regardless of which narrative a tech CEO picks, numbers don’t lie. Computer science was often venerated as a “golden ticket” to stable jobs in the tech world. However, new data from the National Student Clearinghouse indicated that it witnessed the biggest enrollment drop (8.1%) of any major in six years amid the ongoing AI boom.
On the contrary, the number of four-year computer science degrees in the US jumped roughly five times, rising above other high-paying fields like nursing and mechanical engineering, according to data from the National Centre for Education Statistics, cited by The Washington Post.