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Artificial intelligence has become the leading factor behind job cuts in the United States in 2026. As businesses expand automation efforts and invest heavily in AI technologies, workforce reductions are increasingly linked to efficiency gains and shifts in operational strategies. In May alone, employers attributed 38,579 job cuts to automation.
Artificial intelligence has become the leading reason cited by employers for job cuts in the United States, with AI-related layoffs in the first five months of 2026 already surpassing the combined total recorded in 2024 and 2025, according to data from Challenger, Gray & Christmas.
“AI is now the leading reason companies give for cutting jobs," Andy Challenger, Chief Revenue Officer at Challenger, Gray & Christmas, said in the report.
The outplacement firm's latest report showed that US employers announced more than 97,000 job cuts in May. This is the highest total for the month since the COVID-19 pandemic in 2020. Layoffs have risen for three consecutive months. The number of layoffs was 48,307 in February. It was increased to 60,620 in March, 83,387 in April, and over 97,000 in May.
According to the report, artificial intelligence accounted for nearly 40% of all announced job cuts in May, up sharply from 7% in January. The share of AI-related layoffs increased steadily through the year, reaching 10% in February, 25% in March, and 26% in April before surging further in May.
The latest increase pushed total AI-linked job cuts in 2026 to 87,714. By comparison, companies cited AI as the reason for 54,836 layoffs during 2025 and 12,742 during 2024 combined.
The technology sector accounted for the largest share of workforce reductions. US technology companies announced 38,242 job cuts in May, the highest monthly total since August 2024. On a year-to-date basis, technology sector layoffs have climbed 66% to 1.23 lakh, making it the hardest-hit industry.
According to Challenger, job cuts in technology are now running at nearly three times the level of the next most affected sector.
Also Read: Cloud Layoffs Hit Google as Tech Giants Redirect Billions Toward AI
As AI adoption accelerates, both employers and workers are adjusting to a changing labor market. Success will depend on developing new digital skills, continuous learning, and identifying roles where human creativity, judgment, and expertise remain essential alongside automation.
"There is going to be more disruption in the future, whether that's coming from AI, whether it's coming from political uncertainty, whether it's coming from other parts of the economy," he said. "That is the world that we are in today."
US payrolls increased by 172,000 in May, while employment data for March and April were revised upwards, according to figures from the Bureau of Labor Statistics. While employment growth remains positive overall, hiring activity continues to lag historical levels. Challenger reported that employers announced 80,742 planned hires in May, which is described as weak compared with pre-pandemic norms.
Labor market experts said a growing mismatch between available jobs and displaced workers is contributing to uncertainty.
