Investors reward some job cuts and punish others as AI savings face scrutiny

Job cuts are not getting a uniform market response. PayPal shares rose after the company said it had cut more than 2,000 employees and reduced management roles by more than a quarter. French auto supplier OPmobility’s shares suffered their biggest fall in three years after it announced plans to eliminate 770 jobs alongside a lower full-year earnings forecast, Bloomberg reported.

Barclays is cutting 5,000 jobs to reduce costs through artificial intelligence. Microsoft is offering buyouts to 60,000 employees, a quarter of its workforce, and its shares also rose slightly after the announcement. That figure describes workers offered buyouts, not completed departures.

Restructuring is becoming more widespread in the U.S. With around 70% of S&P 500 companies having reported, 147 had announced restructuring charges, against 178 across the entire third-quarter earnings season in 2025, according to Bloomberg-compiled data. The number announcing broader restructurings is on course to rise about 20% year over year; European announcements are running at a similar pace to a year earlier.

Investors appear to be distinguishing between companies adjusting from a position of strength and those responding to pressure, Berenberg stock strategist Chris Armstrong told Bloomberg. Volvo Cars’ shares plunged after it said it would deepen job cuts as its market in China contracted. The additional reductions affect 2,500 workers.

The AI explanation faces a separate test. Joachim Klement, a strategist at Panmure Liberum, questioned whether the promised productivity gains were materializing broadly enough to offset slower revenue growth.

“The hope is that productivity gains from AI will enable companies to increase profits even as revenue growth slows down. But we have no evidence that AI is increasing productivity outside the technology sector yet,” he told Bloomberg.