US Job Cuts Rise in May as AI Remains Leading Driver

Rising Layoffs Led by AI and Corporate Restructuring

US-based employers reported 97,006 job cuts in May 2026, up from 83,387 in April. This makes May’s figure the highest since January and the largest May total since 2020. The increase also extends a three-month trend of rising layoffs.

AI was identified as the main reason for the cuts for the third consecutive month. According to Andy Challenger of Challenger, Gray & Christmas, the broader layoff picture also reflects a “sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses,” which he said indicates companies are “restructuring aggressively as they reposition for an AI-driven economy.”

Sector Breakdown and Year-to-Date Context

The technology sector accounted for the largest share of announced reductions in May, with 38,242 job cuts. This is the highest monthly total for the technology sector since August 2024. Other sectors with notable layoff figures included transportation with 6,909 cuts, services with 6,288, and fintech with 5,731.

Despite the recent monthly increases, year-to-date announced job cuts remain below last year’s pace. So far in 2026, employers have announced 397,755 job cuts, a decline of 43% from the same period a year earlier, when reductions to the federal workforce pushed totals to historic highs. Adjusting for that prior federal workforce distortion, job cut activity in 2026 is running roughly in line with 2024 levels.