‘AI is now the leading reason companies give for cutting jobs,’ says new report—what that means for workers U.S. employers announced over 97,000 job cuts in May 2026, the highest May figure since 2020, with AI cited as the primary reason for nearly 40% of these layoffs. Despite this increase, labor market experts suggest the overall economy is robust, with strong job growth in May. However, some question whether AI is the sole cause of layoffs, suggesting it may be used as justification, and advise workers to diversify their skills and job search strategies.

• Job cuts in May 2026 reached over 97,000, the highest for May since 2020.
• AI was cited as the reason for almost 40% of May’s job cuts, a significant increase from earlier in the year.
• The tech industry reported 38,242 job cuts in May, concentrated by AI.
• Despite rising layoff numbers, the U.S. labor market shows strong job growth, with payrolls rising by 172,000 in May.
• Experts question if AI is always the true reason for layoffs, suggesting it might be used as a scapegoat.
• Companies are reallocating resources in response to AI, potentially cutting jobs in some areas while hiring in others.
• Hiring numbers in May were historically low by pre-pandemic standards, causing anxiety among workers.
• Job seekers are advised to diversify their approach, explore other fields, and expect future disruptions.