SUSE lays off 1 in 10 workers – citing AI and automation

ZDNET’s key takeaways

- The open-source software company announced forthcoming 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 noted that AI is rapidly changing how software companies function.

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“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.”

Shifts in tech work

AI is impacting many parts of the tech industry, including open source. Just last month, Linus Torvalds announced he had used Claude Code to write a Linux patch, which Linux enthusiasts read as an evolution of his stance on AI.

By some reports, businesses are finally seeing some ROI from AI after a few years of uncertainty. But that remains localized, ironically, to tech itself. As one economist recently noted, AI has primarily increased revenue per employee at major tech companies, while leaving most other companies unchanged.

The trade-off for that growth is, at least in some cases, layoffs. But layoffs credited to AI in some way don’t mean that human roles are always being replaced. Last month, Microsoft announced it would buy out 60,000 of its workers — some of which are in its Copilot division — to prioritize AI efforts, though it’s also likely the company is reacting to spending a significant amount of money on AI infrastructure.

Jobloss.ai’s layoff tracker shows primarily 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 cut isn’t always jarringly huge.

It’s also hard to tell whether a layoff strategically frames pre-AI plans as being due to AI capabilities or is actually a result of them. That question circulated around Block’s major layoffs earlier this year. Squarespace also announced layoffs of 19% of its staff yesterday, though company communications don’t explicitly name AI. Still, vibecoding has impacted website builders overall, though Squarespace itself has invested in AI offerings.

Also: Why replacing staff with AI backfires

Van Leeuwen’s email to staff acknowledged where SUSE has already begun to change, though it’s unclear whether he meant by adopting AI tools internally.

“Across SUSE, modern tooling is already changing our daily workflows, enabling teams to move faster with less operational overhead and flatter reporting lines. The requirement for some existing roles has greatly diminished. Other roles will evolve over the next few years,” he said.

Mass layoffs haven’t hit – yet

While several tech companies have announced highly visible layoffs this year that they’ve also framed as related to AI, economists agree that the massive cross-industry layoff wave many fear has 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.”

Still, AI investments, vibecoding, and shifting priorities are changing the software scene overall.