Smart Money Flow: Where is the money going? Wall Street is疯狂 selling off tech stocks and fully investing in this crypto sector. Those in the know are already laying low!

The US employment report for February 2026 contains a number that has left economists speechless. The rate of job losses in the tech industry has surpassed the levels seen during the 2008 financial crisis and the COVID-19 pandemic lockdowns in 2020.

Over the past twenty years, these two events marked the most severe shocks to the US economy. Now, the tech industry has used layoffs to leave both behind. The question is, in 2008, banks collapsed; in 2020, the pandemic hit; but what collapsed in 2026?

Rewinding to 2020–2022. The explosion of digitalization driven by the pandemic, combined with the Federal Reserve’s near-zero interest rates and cheap money, led tech companies to expand wildly as if they had discovered a gold mine. Some leading firms doubled or even tripled their employee numbers within two or three years. The logic was simple and crude: growth was the only KPI, burning money was the only method, and headcount was the only tool.

Then interest rates rose. The foundation of the growth logic loosened, valuations declined, investors became cautious, and layoffs quietly began at the end of 2022. Most people thought this was just an “adjustment,” expecting everything to bounce back once the market improved. But it didn’t.

In 2025, the global tech industry cut about 245,000 jobs. US companies accounted for nearly 70%, over 170,000. By 2026, the trend not only continued but accelerated—over 30,000 layoffs in the first six weeks alone, with more than 80% from US firms.

After Amazon posted a record $71.69 billion in revenue in 2025, it announced 16,000 layoffs in 2026, accounting for more than half of all announced tech layoffs. Block CEO Jack Dorsey wrote in a letter to shareholders: “Smaller teams using the tools we’re building can do more and do better.” Autodesk and Salesforce each cut about 1,000 jobs early this year.

Note this detail: most of these companies are still profitable, some even hitting revenue records. These aren’t existential layoffs; they are deliberate choices.

Every large-scale layoff needs a narrative. This round, AI became the most convenient explanation. “Layoffs due to AI replacement”—sounds irrefutable. But data tells a different story.

According to market statistics, out of approximately 245,000 global tech layoffs, only about 69,800 (28.5%) can be directly attributed to AI and automation adoption. Over 70% of layoffs have other reasons behind them.

IBM CEO Arvind Krishna pointed out: “From 2020 to 2023, some companies increased their staff by 30% to 100%; this was just the adjustment needed.” He didn’t blame AI but pointed to a simpler truth: the hangover from overhiring.

Of course, AI isn’t entirely innocent. Its role is more subtle than “direct replacement”—AI makes companies realize many roles are simply unnecessary. It’s not that someone was fired directly; management re-ran the numbers and found discrepancies.

Some analysts describe this round of layoffs as a “structural reset,” distinguishing it from “short-term cost correction.” The latter implies jobs will return when the market recovers; the former suggests those jobs are gone forever. This is key to understanding this tech winter.

Previous large layoffs were mainly due to temporary demand contraction, with companies waiting for economic recovery. But this time, many eliminated roles are being permanently redesigned—focused on AI-first workflows, with companies rebuilding their organizational structures.

Daniele Grassi, CEO of General Assembly, issued a sober warning: companies are cutting headcount while increasing AI investments, creating a skills gap that will ultimately slow down their transformation. Layoffs are creating new risks.

Market data shows a peculiar polarization: demand for AI-related roles is surging, while traditional generalist tech roles are shrinking. “Tech is both growing and contracting”—these two phenomena are happening simultaneously, but to different groups.

If you have an AI engineering background, understand prompt engineering, and can optimize large model inference costs, 2026 might be the best job market in years for you. If you’re a general product operator, middle-platform engineer, or traditional salesperson, you may face a rapidly shrinking market. This isn’t industry-wide decline; it’s a rapid redefinition of “valuable talent.”

Oxford Economics Chief Economist Adam Slater warns: if the tech sector continues to decline, US GDP growth in 2026 could fall to 0.8%, edging close to recession. Without tech investment, US growth in the first half of 2025 was almost flat. The US economy’s dependence on tech has become so deep that a ripple in one part affects the whole system.

But there’s another perspective. Comparing the total layoffs in 2025 to 2024, the number actually decreased by about 20%. The narrative of “2025 as a disaster year” doesn’t fully hold up based on the data.

This wave of layoffs resembles a prolonged transition rather than a bottoming-out decline. Companies are “freeing up space”—space for AI tools, leaner teams, higher efficiency. This logic will persist until some boundary is reached—perhaps regulation, technical bottlenecks, or consumer reactions.

Dorsey’s phrase “smaller teams doing more” reflects a collective belief across the industry. The question is, when everyone is shrinking, who will support the next “bigger”?

What the tech industry is experiencing isn’t just a typical cyclical downturn but a fundamental questioning of “what role humans play in the system.” Unfortunately, layoffs alone cannot answer this question. For the crypto market, macroeconomic structural pressures and the rebalancing of capital flows are variables that must be considered when evaluating the long-term narratives of core assets like $BTC and $ETH.