U.S. employers announced 97,006 job cuts in May, marking a 16% increase from April's 83,387 and a 3% rise from the 93,816 cuts reported in May of the previous year, according to data from Challenger, Gray & Christmas [1]. Artificial intelligence (AI) was cited as the leading reason for these layoffs for the third consecutive month, with 38,579 job cuts attributed to AI—accounting for 40% of all May layoffs and representing the highest monthly total since Challenger began tracking this reason in 2023 [1].
The technology sector was particularly impacted, announcing 38,242 job cuts in May, the highest for the sector since August 2024. Year-to-date, tech firms have reported 123,653 layoffs, a 66% increase compared to the same period in 2025, making it the sector with the most job cuts in 2026 [1]. Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, noted that while AI is not yet causing the 'jobpocalypse' some predicted, companies are already acting on the technology, using it as the primary reason for workforce reductions [1].
Other sectors also saw significant layoffs. The transportation sector announced 6,909 job cuts in May, bringing its 2026 total to 40,388—a 449% increase from the same period last year. Services firms cut 6,268 jobs in May, totaling 17,065 for 2026, which is a 61% decrease from the previous year. Healthcare and products manufacturers have announced 30,414 job cuts so far in 2026, a 17% increase year-over-year [1].
Bankruptcy-related layoffs were the second-leading reason for job cuts in May, accounting for 5,637, the highest since February 2025. Other notable reasons for layoffs in 2026 include market and economic conditions (69,645 cuts), company closings (66,733), and mergers and acquisitions (11,989), with the latter up more than six-fold from the same period last year [1].
Challenger emphasized that the labor market is being reshaped by technology in real time, and the pace of AI-driven workforce changes remains an open question [1].
CONCLUSION
AI-driven workforce reductions have become the dominant trend in U.S. job cuts, particularly impacting the technology sector and driving overall layoff numbers higher in May. The data suggests that companies are rapidly adapting to AI, leading to significant market and employment shifts. The ongoing rise in layoffs tied to AI, bankruptcies, and mergers signals continued volatility in the labor market.