AI was the top reason cited for US job cuts for the third straight month in May

With Corporate America finding plenty of ways to describe its AI-driven reinvention this year — from preparing for the “agentic era” to building businesses with “humans around the edge” — last month brought yet another unmistakable sign that AI has become the go-to explanation for layoffs, according to new data from Challenger, Gray & Christmas. 

In May, US employers announced 97,006 job cuts, the highest tally for the month since the pandemic spring of 2020. Artificial intelligence was cited ahead of all other job cut reasons for the third month running, with 38,579 cuts attributed to the technology — nearly 40% of the total and the highest single-month figure since Challenger began tracking it in 2023.

AI has now been linked to more than 87,700 cuts through May, easily blowing past the ~54,800 attributed to it in all of 2025 — a figure that had already more than quadrupled from 2024 and risen roughly 13x from 2023. The technology has so far contributed to more than one-fifth of all announced job cuts in the US, up from just 0.6% in 2023.

Of course, that doesn’t mean AI is actually single-handedly replacing all those workers. A growing body of analysis has questioned whether companies are, in fact, using the technology as a more investor-friendly shorthand for cuts actually driven by more familiar pressures, like cost-cutting, restructuring, or simply slower hiring.

The anxiety is getting harder to dismiss, though. This week, Anthropic pledged $200 million toward studying AI’s economic impact, as CEO Dario Amodei warned in a new essay of the “decent possibility” of “significant enduring job loss” caused by AI.

Go Deeper: AI is becoming a go-to reason for layoffs — but is it actually replacing workers?