AI becomes leading cause of layoffs, accounting for 26% of April's job cuts in the US

AI emerges as a top cause of layoffs, accounting for 26% of April's job cuts

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting. Artificial intelligence is the leading reason companies cite for layoffs for the second straight month, accounting for more than one in four job cuts in April, according to a new report from outplacement firm Challenger, Gray & Christmas. The report found 21,490 AI-related cuts last month, or 26% of the 88,387 total, marking the second straight month the technology has been the top driver of layoffs. While AI is often blamed for job losses and fewer entry-level opportunities, some skeptics question whether it is the sole cause. Some companies have also seen stock gains after pivoting to AI, such as sneaker maker Allbirds, whose shares surged about 600% after announcing plans to shift away from footwear and toward AI. AI-related layoffs came as overall job cuts rose 38% in April from March, Challenger found. The largest share -- 33,361 cuts -- occurred in the technology sector. Some tech firms say they're shifting spending away from labor to direct more capital toward AI. "Regardless of whether individual jobs are being replaced by AI, the money for those roles is," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in the statement. Other factors are driving layoffs, including President Trump's evolving tariff agenda and the Iran war, Challenger said. Throughout 2026, "market and economic conditions" was the most cited reason, accounting for 53,058 cuts, the company found. In April, company closures were the second most common reason for job cuts, followed by cost-cutting. Other data suggests AI is affecting some white-collar jobs. In past automation cycles, blue-collar workers were more likely to bear the brunt. Data from the U.S. Bureau of Labor Statistics offers some evidence of AI-related job losses, according to Yardeni Research President Ed Yardeni. Layoffs in professional and business services -- sectors vulnerable to AI -- rose by 150,000 in March from a year earlier. Still, Yardeni and other economists say AI could eventually create jobs by driving demand for new roles that did not exist just a few years ago.

US Job Cuts Rise 38% In April As AI-Driven Layoffs Hit Hiring Plans - Amazon.com (NASDAQ:AMZN), Meta Plat

U.S.-based employers announced 83,387 job cuts in April, up 38% from March, according to a report released Thursday by Challenger, Gray & Christmas. The April total was down 21% from the 105,441 cuts announced during the same month last year. Still, it marked the third-highest April layoff total since 2009 outside the pandemic period. Employers have announced 300,749 job cuts so far in 2026, though that figure remains roughly 50% below the same period last year. Hiring plans weakened sharply alongside the increase in layoffs. Companies announced plans to hire 10,049 workers in April, down 69% from March and down 38% year-over-year. "Technology companies continue to announce large-scale cuts and are leading all industries in layoff announcements," said Andy Challenger, workplace expert and chief revenue officer at Challenger, Gray & Christmas. "Regardless of whether individual jobs are being replaced by AI, the money for those roles is." AI Drives Layoffs Technology companies led all sectors with 33,361 announced job cuts in April and 85,411 layoffs so far this year, up 33% year-over-year. Artificial intelligence also led all reasons cited for layoffs for the second straight month, accounting for 21,490 announced cuts in April. Workers Turn Cautious The layoff surge coincides with signs of growing worker anxiety. A recent New York Federal Reserve labor market survey showed the share of workers expecting to switch employers fell to its lowest level since 2021. Job satisfaction tied to wages and promotion opportunities also hit record lows. U.S. GDP grew just 0.5% in the fourth quarter of 2025, while ADP chief economist Nela Richardson recently said only 28% of workers feel their jobs are safe from elimination. The broader economic backdrop has also become more uncertain. Commodity prices recently climbed to their highest level in more than a decade, reigniting inflation concerns as energy and raw material costs rise globally. Challenger said tariffs, the ongoing war in Iran, automation, AI and shifting consumer behavior were contributing to layoffs in industrial sectors. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.