Companies blame AI for deep job cuts for second month in a row
Companies blame AI for deep job cuts for second month in a row
Brendan RasciusSat, May 9, 2026 at 4:50 PM UTC
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U.S. companies have named artificial intelligence as the leading driver of job cuts for the second consecutive month, a new analysis has found.
In April, employers announced 83,387 layoffs — a 38 percent increase from March — according to a report released Thursday by Challenger, Gray & Christmas, a global outplacement firm.
AI accounted for 26 percent of those cuts, making it the most frequently cited reason for workforce reductions for a second month. So far this year, 49,135 layoffs have been attributed to AI, ranking it as the third-largest cause of planned job losses overall.
Companies are deepening their reliance on AI with major firms, including Google, Amazon, and Meta, pouring billions into the emerging technology particularly in the construction of large-scale data centers across the nation.
In April, Meta announced it would slash about 10 percent of its workforce, citing increased expenditures on AI. Earlier in the year, chief executive Mark Zuckerberg said: “I think that 2026 is going to be the year that AI starts to dramatically change the way that we work.”
US companies cited artificial intelligence as the leading cause of job cuts for the second month in a row, according to a new analysis. Pictured here, laid off State Department employees carry boxes as they walk out of the Harry S. Truman Federal Building on July 11, 2025 (Getty Images)
At the same time, employee unease is growing. An April survey by The found that 18 percent of U.S. workers believe their current job is likely to be eliminated within the next five years due to new technology, automation, robots, or AI.
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The latest report found that the technology sector was hardest hit by layoffs with 33,361 job cuts in April, bringing the year-to-date total to 85,411. That figure represents a 33 percent increase from the same period in 2025 and marks the sector’s highest year-to-date total since 2023.
“Technology companies continue to announce large-scale cuts and are leading all industries in layoff announcements,” Andy Challenger, the chief revenue officer at Challenger, Gray & Christmas, said in a press release. “They are also often citing AI spend and innovation. Regardless of whether individual jobs are being replaced by AI, the money for those roles is.”
Other industries also reported significant layoffs in April, including the government sector, which announced 9,149 job cuts; warehousing, with 5,743 cuts; and the pharmaceutical industry, which reported 7,440 layoffs through April — a 500 percent increase from the same period in 2025.
The future outlook also looks bleak. In April, hiring plans plummeted 69 percent from March to about 10,000 planned positions. They’re down 38 percent from last April, when companies planned to hire 16,191 people.
Companies have deepened their reliance on AI, particularly by pouring billions of dollars into the construction of data centers across the nation (Hans Lucas/AFP via Getty Images)
“With a number of factors potentially impacting summer travel plans as well as how businesses operate across sectors, we predict hiring plans will remain muted,” the firm’s report concluded.
The latest U.S. Jobs Report, published Friday, found that the American market added 115,000 new positions despite the significant economic disruption caused by the Iran war. This figure surpassed forecasters' expectations of 65,000 new jobs, though it marked a deceleration from the 185,000 jobs created in March. The national unemployment rate held steady at a low 4.3 percent.
Hiring has been predominantly driven by the healthcare sector, which has added 360,000 jobs over the past year, catering to an aging American population. In contrast, other sectors collectively cut 120,000 jobs over the same period. Diane Swonk, chief economist at KPMG, cautioned that this healthcare hiring boom may not be sustainable.
Source: “AOL Money”
