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

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.

Companies name AI as top reason for job cuts for second straight month: Analysis

Companies are increasingly citing artificial intelligence as justification for layoffs, according to a new analysis highlighting growing concerns about AI's impact on the workforce. U.S.-based employers announced 83,387 job cuts in April, a 38 percent increase from March, according to a report released Thursday by Challenger, Gray & Christmas. Layoffs were still down 21 percent from April 2025. For the second straight month, AI was listed as the leading reason for the job cuts. Employers attributed 21,490 planned layoffs in April to artificial intelligence and automation efforts, accounting for more than a quarter of all cuts, the report notes. The findings come as companies across the technology, finance and customer service sectors ramp up investments in generative AI tools aimed at improving efficiency and lowering labor costs. Technology companies continued to lead all industries in layoffs this year. Challenger data showed the sector announced tens of thousands of cuts during the first few months of 2026 as firms restructured and shifted spending toward AI initiatives. "Technology companies continue to announce large-scale cuts and are leading all industries in layoff announcements. They are also often citing AI spend and innovation," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in a statement. "Regardless of whether individual jobs are being replaced by AI, the money for those roles is." Some businesses have also indicated AI could reduce future hiring needs, particularly for entry-level and white-collar positions. The report adds to growing anxiety among workers about how artificial intelligence could reshape the labor market. Recent surveys show many Americans fear AI could eliminate jobs or reduce career opportunities in certain fields once considered relatively safe from the emerging technology. Some workplace experts have also cautioned that companies may be overstating AI's role in layoffs to frame broader cost-cutting efforts around the technology boom -- a trend some analysts have labeled "AI-washing." Billionaire entrepreneur Mark Cuban recently argued workers who learn how to effectively use AI tools will have an advantage in the evolving economy, though he acknowledged the technology is likely to transform hiring across industries. Despite April's job increase, overall layoffs remain significantly below last year's pace. Challenger reported employers announced 300,749 job cuts through the first four months of 2026, down roughly 50 percent from the same period in 2025. The firm added that economic uncertainty and restructuring also contribute to layoffs. The growing push toward AI has also extended into the federal workspace, which saw a striking number of layoffs since President Trump returned to office. The Trump administration has moved to loosen some Biden-era restrictions on the technology and unveiled an executive order late last year to curb state-level regulations. The latter drew intense backlash. White House chief of staff Susie Wiles said earlier this week that the administration is focused on ensuring the "best and safest tech" is being used to defeat threats -- including AI models. Though, the administration is still working to tame fears around the growing technology. "The White House will continue to lead an America First effort that empowers America's great innovators, not bureaucracy, to drive safe deployment of powerful technologies while keeping America safe," Wiles said. "Really, it's common sense!"

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.