Challenger says AI isn’t a ‘jobpocalypse’ yet but companies are citing it the most when announcing layoffs
skynesher/Getty Images
- Challenger said AI was the cited reason for 40% of job cuts in May.
- In 2026, AI is the leading reason companies cite for layoffs.
- The outplacement firm also said this isn’t “yet the jobpocalypse some predicted.”
AI may not be a complete disaster for jobs yet, but companies are citing it more than any other reason when announcing layoffs, according to a new report from Challenger, Gray & Christmas.
The global outplacement firm’s latest report said AI accounted for 40% of 97,006 job cuts by US-based employers in May, the highest monthly total since Challenger began tracking AI as a reason for layoffs in 2023. So far in 2026, Challenger says 87,714 cuts have been attributed to AI, far surpassing the total of 54,836 in 2025.
“AI isn’t yet the jobpocalypse some predicted,” Andy Challenger, labor and workplace expert and chief revenue officer of Challenger, Gray & Christmas, said in a statement accompanying the report. “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.”
Overall, Challenger found that May 2026 saw the highest number of layoffs since 2020, when 397,016 job cuts were announced during the height of the global COVID-19 pandemic. Technology remains the leading sector for layoffs by “a wide margin,” the report said.
The extent to which AI is to blame for layoffs is highly contested, including, not surprisingly, by those whose companies are directly involved in the AI boom. OpenAI CEO Sam Altman recently said companies were “AI washing” their layoffs, blaming the nascent technology for their decisions when other business factors were at play.
Elsewhere, Apollo Global Management’s chief economist Torsten Sløk wrote last week that he sees “zero evidence of job losses because of AI,” citing the ADP National Employment Report.
Outside of AI, Challenger’s report found that so far this year, the next biggest reasons attributed to layoffs are “market and economic conditions,” which have been cited for 69,645 cuts; “closings,” which have been cited for 66,733 cuts; and “restructuring,” which has been attributed to 52,249.