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Artificial Intelligence (AI) has solidified its position as the leading cause of job cuts in the United States, with employers announcing a staggering 97,006 layoffs in May. This marks the third consecutive month where AI has been cited as the primary driver for workforce reductions, according to new data.
The total number of job cuts in May represents a 16% increase from April’s 83,387 layoffs and a 3% rise compared to May of the previous year, which saw 93,816 cuts. AI alone accounted for 38,579 of these job losses, representing 40% of all announced layoffs for the month. This figure is the highest monthly total attributed to AI since data tracking began in 2023.
“The labor market is being reshaped by technology in real time. 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 and chief revenue officer of Challenger, Gray & Christmas.
The technology sector was particularly hard-hit, announcing 38,242 job cuts in May, the highest monthly figure for the industry since August 2024. Year-to-date, tech firms have announced 123,653 cuts, a substantial 66% increase from the same period in 2025, leading all other sectors in layoffs.
Challenger noted, “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.” He added, “The open question isn’t whether AI changes the workforce, but how fast.”
Beyond AI, the transportation sector reported the second-highest number of job cuts in May with 6,909, bringing its year-to-date total to 40,388, a 449% increase year-over-year. Services firms saw 6,268 cuts in May, contributing to a sector total of 17,065 for 2026, a 61% decrease from the same period last year.
The healthcare and products manufacturing sectors have announced 30,414 job cuts so far this year, a 17% increase compared to the same period in the previous year. Bankruptcy-related layoffs were the second-leading reason cited for job cuts in May, with 5,637 announcements, the highest number linked to bankruptcies since February 2025.
Market and economic conditions have been cited for 69,645 cuts year-to-date, while company closings accounted for 66,733. Mergers and acquisitions (M&A) were attributed to 11,989 job cuts in the same period, marking a more than six-fold increase from the 1,889 cuts linked to M&A the previous year.
“On top of the headline AI story, we’re seeing a sharp rise in cuts tied to mergers and acquisitions and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy,” Challenger concluded.
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