United States technology companies announced the highest number of job cuts in nearly two years during May, as firms increasingly redirect resources toward artificial intelligence initiatives. According to data from outplacement firm Challenger, Gray & Christmas Inc., the tech sector planned to eliminate 38,242 positions last month, marking the largest monthly total since August 2024.
Year-to-Dee Cuts Surpass 2025 Levels
So far in 2026, the industry has announced 123,653 job cuts, representing an increase of more than 65 percent compared to the same period in 2025. These reductions align with recent high-profile workforce restructuring plans tied to AI adoption at major companies including Meta Platforms Inc., Intuit Inc., and Cisco Systems Inc.
While tech firms led in layoff announcements, they also reported the largest hiring plans of any sector, according to the Challenger report. Across all U.S. industries, employers have announced 80,472 planned hires so far this year. Although this figure surpasses totals for 2024 and 2025, it remains well below the hiring numbers recorded during the same periods from 2019 through 2023.
Broader Labor Market Trends
Total private-sector job cut announcements across the U.S. economy declined seven percent over the first five months of 2026 compared to the same period last year. This reinforces the picture of a persistent "low-hire, low-fire" environment in most industries, as described by labor market analysts.
"The labour market is being reshaped by technology in real time," said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas. "AI is now the leading reason companies give for cutting jobs."
Despite the surge in layoff announcements, unemployment insurance claims have not risen significantly. The job reductions have primarily targeted white-collar positions, which may explain the muted impact on overall claims data.
Upcoming Jobs Report
The government is scheduled to release its monthly jobs report on Friday. Economists expect the data to show that U.S. employers added 85,000 jobs in May, which would cap the strongest three-month stretch of job gains in over a year.
