How to keep IT teams strong after a layoff

“You have to do more with less resources,” goes the old management cliché. For IT pros in 2026, there’s a variation on that: You have to do more with less resources…and more AI.

To use a recent example: When Amazon announced 16,000 layoffs, its second major workforce reduction since October, the cuts came months after CEO Andy Jassy reportedly said the company would need fewer employees as it increased adoption of GenAI tools.

We spoke with business pros about how IT leaders can keep their departments running smoothly following a reduction in workforce and demands to increase their AI usage.

Tracker Layoffs.fyi calculated 24,818 tech-job cuts across 27 companies in January, one-fifth of the total number of tech-employee layoffs in 2025.

How to lead during layoffs. AI represents another wave of turbulence common to an always evolving, hype-heavy sector like tech. Decades before we were all talking about bots, John Kolm, an information services manager for an Australian local government in the 1990s, was told he had to keep his IT team small.

“The challenge was to run an organization of about 1,000 people, over about $9 billion worth of rateable property, with an IT team of maximum six people,” Kolm, now CEO of workplace consultancy Team Results USA, said.

Kolm shared with IT Brew the strategy he adopted to support his staff:

• Convince business leaders for serious capex to keep up with customer demand and modernize infrastructure
• Eliminate labor-intensive tasks—not doing more with less, but doing less with less. “Your first step as a leader is to work with your people and work out which things we are now going to not do, which missions are now going to be sacrificed, and those missions need to be sacrificed quickly and completely,” he said.
• Get contractors ready to help. If a flood takes down an IT infrastructure, you need to recover; “you can’t do that with a team of six people," Kolm said.
• Listen to each employee’s concerns “to the very end,” be honest about uncertainties, and ask what each person needs to work with some level of satisfaction.
• Sell employees on “the vision”; for instance, a leader may want to emphasize new exciting technologies to work with, and resulting new skills to add to a résumé.

Forward to the future. A business’s vision these days likely involves AI deployments. A global study from EY, released on January 20, found that surveyed CEOs expected transformative (32%) or significant (58%) business-model impacts from AI.

Vasant Dhar, professor at NYU Stern and the Center for Data Science, said tech pros on reduced teams must ensure they aren’t spending too much time on routine tasks that GenAI handles quite well—like easy coding or simple quality assurance. Both individuals and team leaders have a role to play in the upskilling.

“Technology has always forced people to up their game, and this is no different. It’s just that this one is turbo-charged, because it’s not just a tool. It’s like an alien that gets better by the day,” Dhar told IT Brew.

Dhar emphasized that employers and employees looking to stay on the cutting edge of AI must find roles that involve accountability and decision-making, like risk management or implementation strategy: “The goal is to really empower people to make some real change in the organization.”

When Dhar considers how AI could replace even his own profession, he thinks of his “edge” as asking the right questions, knowing when to cut losses on an R&D effort, and pulling from knowledge gained from experience—skills that shine even when AI offers its own form of quick solutions.

IT pros, he said, must find a similar edge—which for today’s tech practitioners is often specialized expertise combined with business thinking. IT leaders can help their team members hone that skill.

“It’s primarily up to individuals to really upskill themselves, but it’s also up to leaders to figure out how to create and retain high-performing talent,” he said. “Because you can get lots of programmers, you can get lots of medium developers, but it’s really hard to get the people who have this understanding of technology and business, and can connect the two.”