Layoffs in US: Tech Sector Reports Highest Monthly Job Cuts in Nearly 2 Years as AI Integration Accelerates
US tech sector layoffs reached 38,242 in May, the highest figure since August 2024. Artificial intelligence is now the primary driver of these cuts, accounting for 22% of total 2026 job losses. While firms like Meta, Cisco, and Cloudflare reduce staff to focus on AI initiatives, the sector continues to lead in overall planned hiring activities.
The US technology sector experienced its most significant wave of layoffs in nearly two years during May, as companies increasingly prioritise capital investment in artificial intelligence. According to data from the outplacement firm Challenger, Gray & Christmas Inc., the tech industry announced the elimination of 38,242 positions last month, marking the highest monthly total for the sector since August 2024. This surge contributes to a total of 123,653 announced job cuts so far in 2026, representing an increase of more than 65% compared to the same period in 2025.
AI as a Catalyst for Structural Changes
Artificial intelligence has emerged as the leading factor behind workforce reductions across the broader economy. To date, AI adoption has been cited as the reason for 87,714 job cuts, accounting for approximately 22% of all announced layoffs this year. This figure has already surpassed the 54,836 firings attributed to AI throughout the entirety of 2025. Amazon Proteus: Tech Giant Unveils New Conversational AI Warehouse Robot Amidst Ongoing Corporate Workforce Layoffs.
"The labor market is being reshaped by technology in real time," stated Andy Challenger, chief revenue officer of Challenger, Gray & Christmas Inc.. He noted that while technology remains the primary industry citing AI for job losses, it simultaneously continues to be the sector with the most active hiring plans, illustrating a broader realignment of labour toward AI-related roles.
Several prominent firms have implemented significant workforce reductions as part of their shift toward AI-centric operations. Meta announced a 10% reduction in its total workforce, alongside the reassignment of 7,000 employees to focus specifically on artificial intelligence initiatives. Similarly, Cisco reported 4,000 job cuts, explicitly linking the decision to the adoption of AI technologies. ‘Managers Are the Biggest Hurdle to AI Adoption’, Says Okta COO Eric Kelleher.https://www.latestly.com/technology/managers-are-the-biggest-hurdle-to-ai-adoption-says-okta-coo-eric-kelleher-7460956.html
Cloudflare also disclosed plans to lay off 1,000 employees, representing 20% of its workforce. CEO Matthew Price explained that the company’s increased reliance on AI has reduced the need for traditional operational roles, including middle management, finance, auditing, and compliance positions. Despite these cuts, the technology sector still leads in new hiring, with 11,250 planned roles announced in May, followed by the electronics, insurance, and energy industries.
(The above story first appeared on LatestLY on Jun 05, 2026 11:41 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
