Challenger, Gray & Christmas says artificial intelligence has now been cited as the reason for 87,714 US job cuts through the first five months of 2026, blowing past the 54,836 attributed to AI across all of 2025.
The headline number
For the year, AI has been cited in 87,714 cuts, or 22% of all 2026 layoffs, already far surpassing the 54,836 attributed to the reason in all of 2025.
In May, AI led all reasons for job cuts for the third month in a row, with 38,579 announced cuts. That is the highest monthly total ever recorded for the reason since Challenger began tracking it in 2023, and it accounted for 40% of all cuts announced in May, up from just 7% in January, 25% in March, and 26% in April.
Tech is carrying the weight
Technology announced 38,242 job cuts in May, the highest monthly total for the sector since August 2024 when 39,563 cuts were recorded. For the year, Technology has announced 123,653 cuts, up 66% from the 74,716 announced through the same period in 2025.
The same Challenger data showed technology outpacing every other sector in new job postings as well, with 11,250 hiring announcements in May. Translation: the sector is cutting and hiring at the same time, just for different skill sets.
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Restructuring, not just AI
“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,” said Andy Challenger, labor and workplace expert and chief revenue officer of Challenger, Gray & Christmas.
So far this year, employers have announced 397,755 cuts, down 43% from the 696,309 announced through the first five months of 2025, when reductions to the federal workforce drove totals to historic highs. Stripping out that distortion, 2026 is running roughly even with 2024, when 385,859 cuts were announced through May.
The caveat traders should hold onto
Challenger tracks employer self-attribution, not verified causation. Some of what gets labeled “AI” could just be routine cost-cutting dressed up for investors, a concern raised earlier this year around so-called “AI washing.”
“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, but how fast,” he added.
Options market and stocks to watch
Watch names most exposed to the AI-labor swap, both on the beneficiary and displacement side:
- MSFT: Microsoft is an anchor partner in the newly launched RAISE US retraining fund and remains a core AI infrastructure name. Watch flow around enterprise AI monetization commentary.
- AMZN: Also backing RAISE US, and continuing to lean on AI and automation across AWS and logistics. Headcount commentary on the next print matters.
- ORCL: Reported to be in a final phase of large-scale cuts even as it pushes capex into AI infrastructure. Watch payroll-to-capex reallocation.
- COIN: Coinbase CEO Brian Armstrong announced in May that his company was cutting 14% of its workforce, attributing the move in part to AI. Watch how the market rewards or punishes AI-cited cuts.
- NVDA: The pick-and-shovel trade on every layoff memo that cites AI productivity gains. Watch options flow into earnings and hyperscaler capex updates.
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