AI Cited in 40% of May Layoffs, Highest Rate Since Tracking Began

Companies increasingly blame AI for workforce reductions

Artificial intelligence has emerged as the most frequently cited reason for layoffs among US employers, accounting for 40% of the 97,006 job cuts announced in May 2026, according to new data from outplacement firm Challenger, Gray & Christmas.

This marks the highest monthly percentage since the firm began tracking AI as a layoff factor in 2023. The technology sector continues to lead all industries in total job reductions by a significant margin, the report found.

For the year to date, companies have attributed 87,714 job cuts to AI—already exceeding the full-year 2025 total of 54,836. May's overall layoff figure represents the highest monthly total since April 2020, when 397,016 cuts were announced during the COVID-19 pandemic's peak.

Why it matters

While the data shows companies are increasingly naming AI when announcing workforce reductions, the actual relationship between the technology and job losses remains disputed. This discrepancy raises questions about corporate transparency and whether AI serves as a convenient explanation for cuts driven by other business pressures. For business leaders, the trend signals both the technology's growing influence on workforce planning and the need for clearer communication about restructuring decisions.

Debate over AI's actual impact

The extent to which artificial intelligence directly causes job losses has become a contentious issue, particularly among those invested in the technology's success.

OpenAI CEO Sam Altman recently accused companies of "AI washing" their layoffs—using the technology as cover for cuts actually driven by other business factors. Meanwhile, Apollo Global Management chief economist Torsten Sløk stated he sees "zero evidence of job losses because of AI," pointing to the ADP National Employment Report as support.

"AI isn't yet the jobpocalypse some predicted," said Andy Challenger, labor and workplace expert and chief revenue officer at Challenger, Gray & Christmas. "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."

Other factors driving layoffs

Beyond AI, companies have cited several other primary reasons for workforce reductions in 2026. Market and economic conditions have been named in 69,645 cuts year-to-date, while business closings account for 66,733 job losses. Restructuring efforts have been attributed to 52,249 cuts.

The findings were first reported by Challenger, Gray & Christmas in their monthly job cut report.