Layoffs in US: Job Cuts Drop 40% in 1st Half of 2026; AI Remains Primary Driver
U.S. layoffs fell 40% in the first half of 2026, though tech sector job cuts surged 83% due to AI-driven restructuring. While AI accounted for 101,743 layoffs, total hiring plans have increased by 10% compared to last year, signalling a complex shift in the American labour market as year-end nears.
United States employers have recorded a 40% reduction in job cuts during the first half of 2026 compared to the same period last year. While this decline is notable, the total of 4,43,604 layoffs still marks the second-highest first-half figure reported since 2020. Last year's higher numbers were largely attributed to a massive surge in government-related job losses, which have significantly tapered off this year.
Tech Sector Faces AI-Driven Layoffs
Despite the broader downward trend in layoffs, the technology industry is experiencing a sharp increase in workforce reductions. As per a report by CFO, tech firms announced 1,39,156 job cuts in the first half of the year, representing a 83% increase from the previous year. Artificial intelligence has emerged as the primary driver behind these eliminations, accounting for 101,743 of the total cuts, or approximately 23% of all corporate job losses in the first half of 2026. Tech Layoffs 2026 Affect Nearly 1,20,000 Employees.
Economic Factors Reshaping Employment
Restructuring efforts aimed at automating roles and reallocating budgets toward AI capabilities remain the dominant force influencing hiring strategies. Market and economic conditions serve as the second most common reason for job eliminations, with 82,115 cuts attributed to these factors. Other significant reasons for job losses include facility closures, which accounted for 78,570 cuts, followed by organisational restructuring with 54,661 losses. Layoffs 2026: Over 1.22 Lakh Laid Off Globally by Tech Companies; AI Primary Reason.
Regional Trends and Future Hiring
Regionally, the Western United States has seen the highest number of layoffs, totalling 1,83,400 in the first half of 2026. In a positive shift, employers have announced plans to hire 91,045 workers, reflecting a 10% increase compared to the previous year. The overall trajectory for the remainder of the year remains dependent on hiring patterns typically observed in the autumn months of September and October, which remain critical for workforce expansion across the country.
(The above story first appeared on LatestLY on Jul 11, 2026 08:21 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).