The latest report by a global outplacement consulting company states that AI was responsible for 40%. of 97,006 layoffs announced by U.S. employers in May — the highest monthly total since the company began tracking AI as a cause of layoffs in 2023. According to Challenger, in 2026, employers have already attributed 87,714 layoffs to AI. This is much more than in the entire year 2025 (54,836).
“AI is not yet the end of the world for the labor market as some have predicted,” said Andy Challenger, labor and workplace expert and chief revenue officer at Challenger, Gray & Christmas, in a statement accompanying the report.
— Like spreadsheets and email before them, this technology will ultimately increase employee productivity, but our data shows that companies are already acting now, citing AI as a reason for layoffs more than any other.
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Record number of job cuts in May
Overall, Challenger said May 2026 saw the highest number of layoffs since 2020, when 397,016 job cuts were announced during the height of the global COVID-19 pandemic. Technology remains the sector most affected by layoffs, by a large margin, the report highlights.
Read also: Can AI be a reason for dismissal? The expert explains
Are companies abusing the automation argument?
The scale of the impact of artificial intelligence on layoffs is a hotly debated issue, also – not surprisingly – by people from companies directly involved in the development of AI. OpenAI CEO Sam Altman recently stated that companies practice AI washing“, i.e. they blame the layoffs on the new technology, when the cause is other business factors.
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Economists divided on AI's impact on employment
In turn, Apollo Global Management's chief economist, Torsten Sløk, wrote last week that sees “no evidence of job losses due to AI”citing the ADP National Employment report.
Outside of AI, the Challenger report found that the next most frequently cited reasons for layoffs this year were “market and economic conditions” (69,645 reductions), “closures” (66,733) and “restructuring” (52,249).
The above text is a translation from American edition of Business Insider
