AI cited in 40% of U.S. layoffs in May; 2026 AI cuts exceed 2025

Challenger, Gray & Christmas reported that employers cited artificial intelligence as the reason for 38,579 U.S. job cuts in May, representing 40% of the 97,006 layoffs announced that month. The firm said AI accounted for 22% of the 397,755 cuts announced so far in 2026, with 87,714 AI-linked reductions year-to-date — already higher than the 54,836 AI-related cuts recorded for all of 2025.

Challenger’s monthly tracking shows AI’s share of cited reasons rose from 7% in January to 26% in April and 40% in May. May’s total of 97,006 was the largest May total since 2020 and marked the third consecutive month of rising announced layoffs.

Technology firms led all sectors in May with 38,242 job eliminations and remain the largest source of cuts this year. Financial technology companies reported 5,731 reductions in May, most of which referenced AI-driven restructuring. Standard Chartered plans to eliminate about 7,800 back-office roles by 2030 as it increases automation.

For the year, employers have announced 397,755 job cuts in 2026, a 43% decline from the 696,309 cuts announced over the same period in 2025; Challenger said the 2025 figure was inflated by large federal workforce reductions. AI-related cuts represent about 22% of the year’s total.

Challenger’s data are based on public company announcements that explicitly cite reasons for layoffs. The firm noted its count includes only those employers that name AI or automation, which may understate broader automation effects when notices do not specify causes.

According to Andy Challenger, chief revenue officer at Challenger, Gray & Christmas: “AI isn’t yet the jobpocalypse some predicted. Like spreadsheets and email before it, the technology will ultimately make workers more productive, but our data shows companies are already acting on it, citing AI for more cuts than any other reason. The open question isn’t whether AI changes the workforce.”

Employers, regulators and labor groups are monitoring how companies deploy AI and automation and how those changes affect job roles and workforce planning.