Artificial intelligence has become the top reason companies are cutting jobs in the United States this year, as businesses continue to reshape their workforce around automation and new AI tools.
According to a report by outplacement firm Challenger, Gray & Christmas, AI-related layoffs in the first five months of 2026 have already passed the combined total recorded in the previous two years. The report shows how quickly companies are linking job cuts to the growing use of artificial intelligence.
US employers announced more than 97,000 job cuts in May 2026, making it the highest May total since the beginning of the Covid-19 pandemic in 2020. Layoffs have now increased for three months in a row, rising from 48,307 in February to 60,620 in March, 83,387 in April and more than 97,000 in May.
The report said artificial intelligence was behind nearly 40 percent of all announced job cuts in May. That marks a sharp increase from earlier in the year and shows how strongly AI is now affecting the job market.
AI-related layoffs made up 7 percent of all cuts in January, before rising to 10 percent in February, 25 percent in March and 26 percent in April. In May, that share climbed even higher as more companies pointed to automation and AI adoption as the reason for reducing staff.
In May alone, businesses attributed 38,579 job cuts to AI and automation. That was the highest monthly figure since Challenger, Gray & Christmas began tracking AI-linked layoffs in 2023. The latest number brought total AI-related job cuts in 2026 to 87,714.
The report said this year’s figure has already crossed the combined AI-linked layoff total from the previous two years, when companies reported 54,836 such cuts in 2025 and 12,742 in 2024.
Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said AI is now the leading reason companies give when announcing job cuts, reflecting the growing role of automation in workforce restructuring.
The technology industry has been affected the most. US-based tech companies announced 38,242 job cuts in May, the highest monthly total for the sector since August 2024.
So far this year, layoffs in the technology sector have jumped 66 percent to 123,000, making it the hardest-hit industry in the US job market. According to the report, tech has recorded nearly three times as many job cuts as the next most affected sector.
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