Surge in Job Cuts Announced by U.S. Employers in May
In May, U.S.-based employers disclosed a staggering total of 97,006 job eliminations, reflecting a 16% increase from April’s figure of 83,387.
Furthermore, this number represents a 3% rise from the 93,816 cuts reported during the same month last year, as noted in a recent report from Challenger, Gray & Christmas.
This month marks the highest number of job cuts for May since 2020, which saw a catastrophic 397,016 redundancies amid the height of the pandemic.
Notably, this occurrence marks the third consecutive month wherein job cuts have escalated, moving from 48,307 in February to 97,006 in May.
Throughout the year to date, employers have reported a combined 397,755 job cuts, a substantial decline of 43% compared to the 696,309 cuts announced during the initial five months of 2025, primarily driven by reductions in the federal workforce.
When excluding this anomaly, 2026’s figures are tracking closely with 2024, which recorded 385,859 cuts through May.
Andy Challenger, a labor and workplace specialist and the chief revenue officer of Challenger, Gray & Christmas, remarked, “The labor market is undergoing a real-time transformation due to technology.
Currently, artificial intelligence is cited as the predominant reason for job cuts, particularly within the Technology sector.
This area, which has been the most significant contributor to job eliminations this year, experienced its gravest month of reductions since early 2023, despite retaining the highest hiring intentions for the current year.”
He further emphasized, While AI has not yet precipitated the anticipated jobpocalypse, analogous to the role of spreadsheets and email previously, this technology is projected to enhance worker productivity.
Our data indicates that companies are already responding to these advancements, with AI being the foremost cited cause for cuts.
The pertinent question is not whether AI will transform the workforce, but rather how swiftly these changes will manifest.
- In May, the Technology sector recorded 38,242 job cuts—the highest monthly figure since August 2024, when 39,563 cuts were logged.
Year-to-date, this sector accounts for 123,653 cuts, an increase of 66% from the 74,716 cuts reported for the same period in 2025. It remains the predominant job-cutter of 2026. - The Transportation sector also announced 6,909 cuts in May, bringing its total to 40,388 for 2026.
This marks an astonishing 449% increase compared to the 7,356 job cuts declared by May 2025, making it the second sector leading in cuts this year. - The Services sector experienced 6,268 job cuts in May, totaling 17,065 for the current year—a striking 61% reduction from the 44,273 cuts announced during the same timeframe in 2025.
- Manufacturers reported 30,414 cuts year-to-date, representing a 17% rise from the 26,008 cuts recorded during the corresponding period in 2025.
- FinTech firms announced 5,731 job cuts in May, with the majority citing AI as their reason for the reductions.
- This month, AI stood as the leading rationale for job cuts for the third consecutive month, attributing to 38,579 layoffs—also the highest monthly total ever documented for this reason since tracking began in 2023. AI-related cuts accounted for 40% of all job cuts announced in May, a marked leap from just 7% in January, 25% in March, and 26% in April.
- In the current year, job cuts linked to AI have reached 87,714, or 22% of all layoffs in 2026, far exceeding the 54,836 cited in all of 2025.
- Bankruptcy accounted for 5,637 job cuts in May, the highest figure recorded since February 2025, which saw 35,172 cuts attributed to bankruptcy. Closures represented 14,546 cuts in May, while restructuring led to 9,942.
- To date in 2026, economic conditions and market fluctuations have been cited for 69,645 cuts, with 66,733 cuts traced to business closures. Job cuts related to mergers and acquisitions reached 11,989 year-to-date—over six times the 1,889 recorded through May 2025.
- Thus far in 2026, U.S. employers have announced 80,472 intended hires, slightly surpassing the 79,741 figures from the same period in 2025, although these hiring announcements remain historically low compared to pre-pandemic benchmarks.
Source link: Sdcexec.com.
