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Outplacement firm Challenger, Gray & Christmas put the number of planned tech-sector eliminations in May at 38,242 — a figure not seen since August 2024. Through the first five months of 2026, no other industry came close to technology's 123,653 announced cuts, a total that represents a 66% increase over the comparable stretch of 2025.
Artificial intelligence was cited as the top reason for layoffs across all industries for the third consecutive month. AI-related cuts reached 38,579 in May — 40% of all job cuts announced during the month — the highest monthly total since Challenger began tracking the reason in 2023. That share has climbed from 7% in January to 25% in March and 26% in April. For the year, AI has been cited in 87,714 cuts, already surpassing the 54,836 attributed to the reason across all of 2025.
"The labor market is being reshaped by technology in real time," said Andy Challenger, chief revenue officer of Challenger, Gray & Christmas. "AI is now the leading reason companies give for cutting jobs and the primary industry citing it is Technology."
Overall, U.S.-based employers announced 97,006 job cuts in May, up 16% from April and up 3% from the same month last year. It is the highest May total since 2020, when pandemic-era cuts reached 397,016. Cuts have risen for three straight months, climbing from 48,307 in February.
