AI & Job Cuts — More than Expected

The month of May’s Challenger Report looks at the impact of AI on jobs. The monthly report from Challenger, Gray & Christmas found businesses based in the U.S. shed 97,006 jobs in May.

Andy Challenger, the labor and workplace expert and chief revenue officer of Challenger, Gray & Christmas said artificial intelligence is the main reason for those job cuts for the third month in a row. Losses from AI hit 38,579. It’s the highest number since the Challenger Report started tracking AI job cuts in 2023.

That’s up 16% from the 83,387 cuts in April and 3% more than cuts in May of 2025.

Overall, AI job replacement accounted for 40% of all of the job cuts in May. In January of this year the percentage of AI-pushed job losses was 7% of the total cuts. In March it was 25% and 26% in April.

So far, for the year, AI is responsible for 87,714 job cuts, or 22% of all of the layoffs in 2026. It has already topped the 54,836 total for all of 2025.

"On top of the headline AI story, we're seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy,” the Challenger report said.

The good news — if you can call it that — is the 397,755 job cuts is down 43% from the 696,309 cuts in the first five months of last year. Federal work cuts were responsible for much of last year’s increase.

Technology, healthcare and healthcare products, pharmaceuticals, transportation, fintech, local government and media led the job cut list.

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