Key insights
- Tech companies are accelerating stock buybacks despite layoffs and AI investment needs. JPMorgan notes the trend is puzzling, suggesting favorable financing conditions. Adobe authorized a $25B buyback, while Meta and Snap announced significant workforce reductions. Buybacks amid layoffs create negative optics, potentially signaling short-term focus over long-term growth, which could weigh on market sentiment.
While the HR departments at Big Tech work overtime to craft exit packages and collect laptops from laid-off workers, companies also appear to be working overtime to repurchase stock.
The tech sector's share of stock buybacks in 2026 is significantly higher than last year, JPMorgan analyst Nikolaos Panigirtzoglou pointed out in a new note on Friday (chart below). The data shows that US tech sector share buybacks are tracking at a higher pace, driven by much stronger buybacks in February and March.
"This acceleration in US tech sector share buybacks year to date, either relative to the same period of 2025 or relative to the second half of 2025, seems puzzling. Given concerns about AI capex financing, one would expect US tech companies to contain rather than accelerate their share buybacks," Panigirtzoglou said.
He added, "We believe that the past few quarters have seen more favourable news in terms of the financing needs of the tech sector, allowing tech companies to bolster their buybacks this year."
Latest example: PDF overlord Adobe (ADBE) authorized a massive $25 billion repurchase plan on Tuesday. This represents nearly 25% of its total market cap, an aggressive move intended to counter investor fears that AI tools might disrupt its core software business.
It's not as if Big Tech cares at all about the optics, but plowing money into buybacks to pad earnings per share right now isn't exactly a great look.
Meta (META) is the latest tech player to reduce its workforce as it reallocates resources toward AI investments.
In a memo sent to staff on Thursday, the company announced it would be slashing its headcount by 10%, affecting roughly 8,000 employees.
Just a week ago, Snap Inc. (SNAP) announced a similar move, cutting roughly 16% of its workforce — approximately 1,000 positions — according to a letter to staff filed with the Securities and Exchange Commission.
The layoffs in Big Tech are piling up, Yahoo Finance's Francisco Velasquez reports, with other main players in the space such as Salesforce (CRM), Amazon (AMZN), and Block (XYZ) joining in the bloodletting.
And so, too, are the stock buybacks for the tech sector.
The extent of the buyback activity from these job cutters will be on display within the next two weeks as Big Tech reports first quarter earnings.
Check all of their cash flow statements!
Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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