U.S. Tech Sector Announced 38,242 Layoffs in May, Highest in Nearly Two Years
Alina Collins
US tech firms announced 38,242 job cuts in May, the highest single month since August 2024; AI has been the top cited reason for layoffs for three straight months, hitting white-collar roles hardest.
How bad were May's layoffs?
Tech announced 38,242 cuts in May, nearly 40% of the 97,006 total layoffs US employers disclosed that month — still the heaviest-cutting sector.
Year-to-date, tech has announced 123,653 layoffs, up more than 65% from the same period in 2025.
Yet overall US layoffs actually fell — the five-month total dropped 43% year-on-year, because 2025's figure was inflated by massive federal-government cuts.
This means → the layoff wave is not broad-based; it is concentrated in tech, while other sectors are improving.
Why has AI become the number-one reason for cuts?
Challenger's report shows AI has been the top cited reason for layoffs for three consecutive months, accounting for 22% of all layoffs announced this year.
The sector citing AI most is tech itself — the companies building AI are also the first to replace their own roles with it.
In plain terms = firms are no longer just "talking about AI"; they are restructuring headcount around AI capabilities, and white-collar jobs face the most direct impact.
Where are the laid-off workers going?
Meta, Intuit, and Cisco have all recently announced AI-related workforce reductions, consistent with this data.
Yet unemployment insurance claims have not risen noticeably — This means → most displaced white-collar workers are still finding exits in the job market, or remain within severance-buffer periods.
Tech companies, despite leading in cuts, also posted the largest hiring plans of any sector — signaling a swap from old roles to new ones.
What does the broader job market look like?
Through May, US employers have announced 80,472 planned hires this year — above 2024 and 2025 levels, but still below every year from 2019 to 2023.
Friday's monthly jobs report is expected to show 85,000 new positions added in May; if confirmed, the three-month hiring pace would be the strongest in over a year.
This reflects a labor market that still has resilience — tech's layoff storm has not yet transmitted into an economy-wide jobs contraction.
Just like spreadsheets and email before it, this technology will eventually boost worker productivity — but our data show companies are already acting, and they cite AI as a reason for cuts more than any other cause.
Andy Challenger
Chief Revenue Officer, Challenger, Gray & Christmas
(May 2026 layoff report release)
Content is for reference only, not financial advice.