U.S. employers announced more than 97,000 job cuts in May 2026, according to a report released Thursday by outplacement firm Challenger, Gray & Christmas.
The announced layoffs are the highest for May since the start of the coronavirus pandemic in 2020, according to Challenger data. The number of layoffs this year has also increased for the third consecutive month, up from 83,387 in April, 60,620 in March, and 48,307 in February.
The report, based on corporate layoff announcements, found that employers cited AI as the main reason for nearly 40% of layoffs announced in May, up from 7% in January, 10% in February, 25% in March and 26% in April. May’s figures bring the total number of AI job cuts announced in the first five months of 2026 to 87,714, up from 54,836 in all of 2025.
“AI is currently the primary reason companies are cutting jobs,” Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said in the report.
But that doesn’t mean it’s time to panic about the “potential apocalypse” of AI in the labor market, says Daniel Keum, an associate professor of business administration at Columbia Business School.
At a macro level, the labor market is “doing well,” Kumu said. The Bureau of Labor Statistics reported Friday that U.S. payrolls rose by 172,000 jobs in May, more than double the Dow Jones consensus estimate of 80,000, marking an upward revision for the previous month. In April, the number increased by 64,000 to 179,000, and in March it was revised upward by 29,000 to 214,000.
In Kum’s view, the impact of AI on employment remains “very concentrated” in one sector, namely the tech industry, with a total of 38,242 job cuts reported in May, according to Challenger data.
Daniel Chao, chief economist at Glassdoor, cautions against taking companies’ claims about AI-related job cuts at face value. “Companies can say (they’re cutting jobs because of AI), but that doesn’t necessarily mean that’s actually why the layoffs are happening,” he says.
Fabian Stefani, assistant professor of AI at the Oxford Internet Institute, told CNBC in October that some companies may be “scapegoating” AI to justify layoffs. “I’m very skeptical that the layoffs that we’re seeing now are really due to true efficiency gains. It’s more of a projection into AI in the sense of, ‘Hey, we have a good excuse to use AI,'” he said.
At the same time, “many companies are definitely changing the way they allocate resources” in response to AI, Zhao said.
That could mean companies cutting jobs in certain areas, Keum cited the layoffs at Meta’s Reality Labs as an example, but continuing to invest and hire in others.
May job growth may be stronger than expected, but the overall “slump in hiring” in recent months means many workers are still concerned about layoffs and worried about their employment prospects, Zhao said. Employers announced plans to hire 80,742 people in May, calling the hiring numbers “historically low by pre-pandemic standards,” the Challenger report said.
Part of the problem for workers is that “open jobs don’t replace lost jobs,” said Thomas Thompson, chief economist at performance marketing firm Havas Edge. For example, “someone who was a biopharmaceutical engineer whose job was replaced by AI is not going to be interested in working in a distribution warehouse,” he says.
Still, Zhao advises job seekers to “diversify their approach” in the current market, such as exploring other fields. His advice is to “look for a similar job within a growing industry.”
“I think a lot of people look at industries and jobs they’ve worked in in the past,” he says. “But many of those skills can be applied to many different fields.”
Given the speed at which technology and economic conditions are evolving, job seekers also need to “expect the unexpected,” Zhao said.
“There will be more disruption in the future, whether it’s from AI, whether it’s from political uncertainty, whether it’s from other parts of the economy,” he says. “That’s the world we’re in today.”
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