AI Rollout Cited as Leading Factor in Surge of US Job Cuts in May

TL/DR –

Artificial intelligence (AI) rollouts are the leading reason for job cuts in the US, with 38,579 positions lost to AI in May, according to data from global outplacement and executive coaching firm Challenger, Gray & Christmas. This accounts for 40% of the 97,006 job cuts announced by American employers in May, a number that represents a 16% increase from April and a 3% rise from May last year. The technology sector, which is the main industry cutting jobs due to AI, announced 38,242 job cuts in May, the highest number for the sector since 2024.

New Data Reveals AI-Driven Job Cuts in US

US businesses increased layoffs in May, attributing workforce cuts to the rollout of artificial intelligence (AI), according to fresh data. Employers reported 97,006 job cuts in May – a 16% rise from April and a 3% increase year over year, reveals a recent report by global outplacement and executive coaching firm Challenger, Gray & Christmas.

With 38,579 cuts, AI was the top cause for layoffs for the third consecutive month, accounting for 40% of all job cuts announced in May. “AI is now the leading reason companies give for cutting jobs and the primary industry citing it is technology,” stated Andy Challenger, labor and workplace expert at Challenger, Gray & Christmas.

Impact of AI on Tech Sector and Economy

The technology sector reported 38,242 job cuts in May, the highest since August 2024, leading other sectors in job cuts this year. Companies are acting on the advancement of AI, citing it for more cuts than any other reason, Challenger explained.

The transportation sector reported the second-most job cuts in May, with services firms and healthcare also experiencing layoffs. There has been a sharp rise in job cuts tied to mergers and acquisitions, and bankruptcy-related layoffs, indicating businesses are aggressively restructuring for an AI-driven economy, Challenger concluded.

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