When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works .
Employers across all industries announced about 97,000 cuts in May, up from 83,387 in April. Transportation ran a distant second to technology at 6,909, followed by services at 6,268. Meanwhile, U.S. employers have announced 80,472 planned hires in 2026 to date, with tech accounting for the largest share of any sector.
Claims for unemployment insurance haven’t risen in line with the layoff announcements, however, and the Labor Department's May payrolls report, due Friday, is expected to show 85,000 jobs added. "AI is now the leading reason companies give for cutting jobs," said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, in a statement.
Several of the firms on this year's layoff lists are also the heaviest spenders on AI hardware. Google , Amazon , Microsoft , and Meta plan a combined $725 billion in capital spending in 2026, up 77% on last year, and Microsoft has attributed $25 billion of its own budget to rising memory and component prices. Meta CEO Mark Zuckerberg told staff that the company's roughly 8,000 job cuts were a direct consequence of its AI infrastructure spending. Roughly three-quarters of that hyperscaler capital outlay this year is tied to AI infrastructure such as servers, GPUs, and data centers rather than conventional cloud capacity.
Whether AI is actually doing the work of the people being cut is an ongoing and unsettled debate. Challenger has ranked AI only the third-leading stated reason for layoffs in 2026, behind market conditions and restructuring, and the firm had logged the technology in more than 49,000 planned cuts through April.
Tech industry lays off nearly 80,000 employees in the first quarter of 2026
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/tech-sector-cut-us-jobs-by-38242-in-may#main
- https://www.tomshardware.com/subscription
- ‘Bots have now passed human traffic online,’ Cloudflare boss laments — says agentic traffic wasn’t expected to eclipse real people until next year
- Tom's Hardware Unfiltered: Computex 2026, Day 2 — Interviews, roundtables, and the first day at the Nanggang Exhibition Center
- Microsoft unveils Project Solara AI, a chip-to-cloud platform built to power a new generation of 'agent-first' enterprise devices — hardware designed to run AI
- Elon Musk's SpaceX secures 100% property tax exemption for planned $55 billion Terafab semiconductor factory in Texas — county approves 35-year deal worth hundr
- Silicon Motion increases sales of SSD controllers amid NAND shortage, but expects NAND shortages to get worse in 2027 — 'supply conditions will become even wors
Informational only. No financial advice. Do your own research.