Pick up where you left off
Hiring jumped in March and got almost no coverage, while Big Tech's AI-efficiency narrative takes over the headlines.
Hey there,
I keep seeing stories of people who laid off their devs and now spend more money on AI tokens than they did with a senior team.
AI itself is not what drives up costs. The real issue is a lack of structure. If you let go of your team without a clear plan for how tools will replace their judgment, knowledge, and work, you end up having to rebuild what you lost. It just costs more, and fewer people remember why things were done a certain way.
The companies that succeed are the ones that understand what AI can really do, where people are still needed, and how to train their teams to work with both. This takes more planning than just sending out a memo about layoffs, but you do not need to be as big as Meta or Amazon to make it work.
At Lupa, we are having this conversation with clients more than any other right now. The real question is how to build a team that knows how to use these tools so well that everyone becomes more valuable than before.
Let's get into it.
đ News Shortlist
1. The March Hiring Surge Got Buried Under the Noise
Recap: The Bureau of Labor Statistics released its March Job Openings and Labor Turnover Survey on May 5. Job openings stayed at 6.9 million. Hires rose to 5.55 million, up 655,000 from February, the biggest monthly gain in over a year. Professional and business services added 165,000 hires. Transportation and warehousing added 108,000. Accommodation and food services added 124,000. Quits and layoffs stayed about the same.
Even though headlines focused on AI layoffs and tariff worries, employers actually hired at the highest monthly rate in over a year. That is what the JOLTS numbers show, but it did not get much notice.
The fact that professional and business services led the hiring surge is important. Companies hire in this area when they are planning for the future, not just filling empty spots. Adding 165,000 hires in one month shows these were thoughtful decisions, not just routine changes.
The broader picture is more complicated. Job openings remain at 6.9 million while monthly hires are still well below that figure, meaning companies are looking but taking longer to commit. Q1 GDP came in at 2.0 percent on April 30, below the 2.3 percent consensus, with most of the growth driven by a government shutdown reversal and defense spending rather than organic private-sector momentum. The macro has weaknesses that the headline number does not show.
Still, the JOLTS data speaks for itself. Employers who hired in March did not wait for a better GDP number. They made their call based on what their businesses needed. If you are still waiting for conditions to feel safer before hiring, the data shows that a meaningful number of your competitors have already acted.
Advice:
Professional and business services hiring moved in March, while most people were looking elsewhere. If you have an open role you have been holding until things settle, the market around you is not waiting.
2. Big Tech Is Repricing Labor. It Is Calling That AI.
Recap: Amazon, Meta, and Microsoft cut or restructured tens of thousands of roles in early 2026, all citing AI-driven efficiency as the primary justification. Meta announced 8,000 cuts effective May 20, concentrated in recruiting, HR, and Trust and Safety. Amazon eliminated approximately 16,000 corporate roles in Q1 while reporting AWS growth of 24 percent, its fastest in 13 quarters. Microsoft offered voluntary separation packages to roughly 8,750 US employees. Across recent earnings calls, Meta and Amazon executives referenced efficiency fifteen times combined. Collectively, Google, Amazon, Meta, and Microsoft plan to spend $725 billion on AI capital expenditure in 2026, up 77 percent from last year. A Bloomberg analysis found that roughly half of the roles attributed to AI-driven cuts will be rehired offshore or at lower salary bands.
The AI narrative is carrying a lot of weight in these announcements. It sounds inevitable and strategic, which is easier than saying we overhired during the pandemic, and the balance sheet needs correcting. The Bloomberg finding complicates the story. If half the cut roles are rehired elsewhere at a lower cost, this is as much a labor repricing story as an automation one.
What is actually happening is a specific financial trade-off. Companies spending $725 billion on AI infrastructure need to find that capital somewhere. Payroll is the highest controllable cost and the one that generates the most useful narrative when explaining the decision to shareholders. Efficiency is accurate if you define it as the conversion of people costs into infrastructure costs. It is not the same as proving that software made those jobs unnecessary.
This difference is important for founders. Big Tech can make these moves because of its size. If Meta cuts three thousand engineers, they still have thousands left and a huge research budget. But if a fifty-person company cuts one engineer to pay for a new tool, their whole product plan could change for months. Smaller companies do not have the same flexibility.
The Washington Post's May 1 analysis says the same thing: these layoffs are not just about AI. Some are about stock compensation timing, others about product changes, and some are about headcount that should have been managed sooner. Framing it as an AI story makes it easier for the market to accept, but that does not make it true.
Advice:
When Big Tech talks about AI-driven efficiency, think about what they are not saying in their earnings calls. For your own team, the real question is not how many people to cut, but whether you have the right people.
3. A Twenty-Five-Year Trade Deal Just Changed the Latin America Investment Map
Recap: On May 1, 2026, the EU-Mercosur free trade agreement entered provisional application after 25 years of negotiations. The agreement creates a 700-million-person trading zone and is the European Union's largest trade deal in terms of the scope of tariff reductions. It sharply reduces or eliminates tariffs on cars (previously as high as 35 percent in Mercosur countries), machinery, pharmaceuticals, and agricultural goods in both directions. EU firms will save an estimated $4.68 billion annually in tariff costs. The deal came into effect as US tariffs under the current administration have pushed both regions to diversify trade relationships.
Brazil, Argentina, Uruguay, and Paraguay have just been connected to the EUâs single market at a significantly lower cost. That is not only an agricultural export opportunity. It is an investment story. European companies now have a cleaner, more economically attractive path to establish operations inside Mercosur. They will use it.
The EU-Mercosur deal accelerates a trend already underway: companies are moving money out of US-focused supply chains because tariffs are making them more costly. European manufacturers, logistics firms, and tech companies seeking nearshore options to serve both North America and Europe will increasingly turn to Brazil, Argentina, and the rest of Mercosur. This will bring more foreign investment, more multinational jobs, and more competition for experienced professionals in those markets.
For US founders hiring in Latin America, the window before European companies arrive in force is narrowing. Today, you compete primarily against local employers and other US companies for senior technical and operational talent in Brazil and Argentina. In a few years, you will also be competing against German industrials, French logistics firms, and Spanish financial services companies that now have a trade framework, making their presence in Latin America significantly more economical. That competition is not here at full scale yet, but it is coming.
Advice:
The EU-Mercosur deal is a long-term change, not just a short-term news story. But the demand for experienced talent in Latin America will rise before it shows up in hiring numbers. If you are planning to build a team in Brazil or Argentina, moving now puts you ahead of the curve.
That is it for this week.
Three stories, one pattern: the headlines do not tell the whole story. The JOLTS data show hiring picked up in areas that the layoff narrative had frozen. The Big Tech AI story is really about finances, not just AI. And a trade deal signed twenty-five years ago just changed the economics of investing in Latin America, even if it will take time to show up in hiring numbers.
The best hiring decisions get made with a clear view of what is actually happening, not what is making headlines. That is what this newsletter tries to bring every week. It is also what we help clients do at lupahire.com.
Until next time,
Joseph Burns
CEO & Founder, Lupa