ZDNET’s key takeaways
- The open-source software company has announced upcoming layoffs.
- Leadership cited AI and automation as factors.
- AI-related layoffs are hitting several tech companies.
According to exclusive reporting by the Register, enterprise Linux provider SUSE will lay off one in 10 of its nearly 2,000-person workforce due to “automation and AI,” CEO Dirk-Peter van Leeuwen told staff via email.
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Van Leeuwen notes that AI is rapidly changing how software companies operate.
“AI capabilities are advancing exponentially, forcing us to radically reimagine our work,” he said, adding that “the organizational design and cost base that SUSE is built on today will not carry us forward successfully.”
Shift in tech work
AI affects many parts of the tech industry, including open source. Just last month, Linus Torvalds announced that he used Claude Code to write a Linux patch, which Linux enthusiasts read as an evolution of his stance on AI.
According to some reports, businesses are finally seeing an ROI from AI after several years of uncertainty. But that remains localized, ironically, to tech itself. As one economist recently noted, AI has largely increased revenue per employee at large tech companies, while leaving most other companies unchanged.
The trade-off for that growth is, at least in some cases, layoffs. But layoffs attributed to AI in any way do not mean that human roles will always be replaced. Last month, Microsoft announced that it would buy out 60,000 of its workers – some of those in its Copilot division – to prioritize AI efforts, but it is also possible that the company will respond by spending a significant amount of money on AI infrastructure.
Jobloss.ai’s layoff tracker mainly features tech companies — including Uber, Salesforce, and GitLab — in its recent entries, but job loss attribution to AI is still mixed, and the number of roles being cut isn’t always huge.
It’s also hard to tell whether a layoff frames strategic pre-AI plans as due to AI capabilities or is actually a result of them. This question circulated around Block’s big layoffs earlier this year. Squarespace also announced layoffs of 19% of its employees yesterday, although company communications did not explicitly mention AI. Still, Vibecoding has influenced website builders in general, although Squarespace itself has invested in AI offerings.
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Van Leeuwen’s email to staff acknowledged where SUSE has already begun to change, though it’s unclear if he meant adopting AI tools internally.
“About SUSE, modern tooling is already changing our daily workflows, enabling teams to move faster with less operational overhead and flat reporting lines. The requirement for some existing roles is greatly reduced. Other roles will develop over the next few years,” he said.
Mass layoffs haven’t hit – yet
While some tech companies have announced highly visible layoffs this year that they also framed as related to AI, economists agree that the massive cross-industry layoff wave many fear is yet to arrive. Gartner even predicts that companies will actually rehire 30% of the employees they tried to replace with AI—and at a higher cost—by 2029 if they don’t overhaul workforce planning.
However, AI investments, vibecoding and shifting priorities are changing the software scene altogether.