Challenger says AI isn't a 'jobpocalypse' yet but companies are citing it the most when announcing layoffs

A recent analysis from Challenger, Gray & Christmas highlights that while artificial intelligence (AI) has not yet led to a total job crisis, it is becoming a prominent reason for layoffs. The report reveals that in May, AI was cited in 40% of the 97,006 job cuts announced by U.S. employers, marking the highest monthly figure since the firm began recording AI-related layoffs in 2023. So far in 2026, a staggering 87,714 job cuts have been linked to AI, significantly exceeding the 54,836 cuts attributed to the technology in 2025. Andy Challenger, the chief revenue officer of the firm, commented on these findings, stating, "AI isn't yet the jobpocalypse some predicted. Like earlier advancements such as spreadsheets and email, this technology is expected to enhance worker productivity. However, our data indicates that companies are already leveraging AI as a reason for layoffs more than any other factor." The report also notes that May 2026 recorded the highest number of layoffs since 2020, a period marked by the COVID-19 pandemic when 397,016 job cuts were reported. The technology sector continues to lead in layoffs, outpacing other industries considerably. The debate surrounding AI's impact on employment remains contentious. Some, like OpenAI CEO Sam Altman, have suggested that companies might be "AI washing" their layoffs, attributing job cuts to AI while ignoring other business challenges. In contrast, Apollo Global Management's chief economist, Torsten Sløk, recently expressed skepticism about the notion of AI-induced job losses, referencing the ADP National Employment Report to support his view. In addition to AI, Challenger's report identifies other significant reasons for layoffs this year. Market and economic conditions have been cited for 69,645 job cuts, while company closings accounted for 66,733 cuts, and restructuring efforts were linked to 52,249 layoffs.