Visa cut 2,600 jobs and blamed "AI evolution" — but it was hiring for the same roles months earlier
Visa's layoffs hit VPs and senior directors while tech-sector job cuts nationally jumped 67% year over year, raising questions about how much AI is really driving the cuts.
What happened: Visa cut about 2,600 jobs on July 28, roughly 7% of its workforce, the same day it reported strong earnings (net revenue up 14% year over year) and days before a $2.4 billion acquisition. CEO Ryan McInerney's memo said AI is helping to accelerate how work gets done at Visa. A later WARN filing showed the cuts weren't just entry-level: six vice presidents, 37 senior directors, 16 chief engineering or architecture roles, plus senior engineers and researchers, lost their jobs at the Foster City campus. Severance cost the company $563 million.
Why it matters: Visa's story fits a bigger pattern. National data from Challenger, Gray and Christmas shows tech-sector layoffs jumped 67% year over year in July, the highest rate of any industry, even as overall U.S. layoffs fell 46% year over year and hit a two-year low. That gap suggests AI-linked disruption, real or claimed, is concentrated in tech and adjacent white-collar roles rather than spread evenly across the economy, making it a distinct labor story rather than a broad recession signal.
How it works, plainly: Companies increasingly frame layoffs as part of AI transformation, but the details rarely show which specific tasks AI now performs instead of a person. In Visa's case, LinkedIn listings from three months before the cuts show it was still recruiting for VP roles in the same office, paying $235,700 to $458,000 plus incentives. A source told CNBC AI played a role but wasn't the sole driver; Evercore ISI analysts called it routine cost reallocation. Communications expert David Grossman noted Visa's memo explained the company's needs but never named what departing employees had built or lost.
The rollout: Visa isn't alone: automakers BMW, Volkswagen and Mercedes-Benz have announced comparable cuts, and Challenger's data shows finance and government right behind tech in layoff volume. For workers, the pattern to watch is whether AI-driven language becomes a standard explanation for cuts that are also about cost-cutting or reorganizing after acquisitions. HR analysts say the bigger tell may be timing and communication: Visa notified roughly 34,000 employees company-wide before individual notices went out, which Grossman called the most damaging hour of the process.