Jun 04 Challenger Report: May Job Cuts Rise 16% from April; Highest May Total Since 2020
AI DRIVES MAY CUTS TO 97,006, HIGHEST MAY TOTAL SINCE 2020; TECH CUTS HIGHEST SINCE 2023; AI LEADS REASONS FOR THIRD MONTH IN A ROW
U.S.-based employers announced 97,006 job cuts in May, up 16% from the 83,387 job cuts recorded in April, and up 3% from the 93,816 announced in the same month last year, according to a report released Thursday from global outplacement and executive coaching firm Challenger, Gray & Christmas.
May’s total is the highest for the month since 2020, when 397,016 job cuts were recorded in May at the height of the pandemic. It also marks the third straight month that cuts have risen, climbing from 48,307 in February to 97,006 in May.
So far this year, employers have announced 397,755 cuts, down 43% from the 696,309 announced through the first five months of 2025, when reductions to the federal workforce drove totals to historic highs. Stripping out that distortion, 2026 is running roughly even with 2024, when 385,859 cuts were announced through May.
“On top of the headline AI story, we’re seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy,” said Andy Challenger, labor and workplace expert and chief revenue officer of Challenger, Gray & Christmas.
Which Industries Cut The Most in May?
Technology announced 38,242 job cuts in May, the highest monthly total for the sector since August 2024 when 39,563 cuts were recorded. For the year, Technology has announced 123,653 cuts, up 66% from the 74,716 announced through the same period in 2025. The sector remains the leading job cutter of 2026 by a wide margin.
“The labor market is being reshaped by technology in real time. AI is now the leading reason companies give for cutting jobs and the primary industry citing it is Technology. Technology, already the year’s biggest job cutter, saw its steepest month of cuts since early 2023, even as it remains the sector with the most hiring plans this year,” said Challenger.
AI isn’t yet the jobpocalypse some predicted. Like spreadsheets and email before it, the technology will ultimately make workers more productive, but our data shows companies are already acting on it, citing AI for more cuts than any other reason. The open question isn’t whether AI changes the workforce, but how fast,” he added.
Transportation announced 6,909 cuts in May for a total of 40,388 so far in 2026, up 449% from the 7,356 cuts announced through May 2025, making it the second-leading sector for cuts this year.
The Services sector cut 6,268 jobs in May for a total of 17,065 this year. That is a 61% decrease from the 44,273 job cuts announced through the same period in 2025.
Health Care/Products manufacturers, including Hospitals, have announced 30,414 cuts so far this year, up 17% from the 26,008 cuts announced in the same period in 2025.
OTHER INDUSTRIES CUTTING JOBS
Pharmaceutical companies announced 5,045 cuts in May for a total of 12,485 through the first five months of 2026, up 753% from the 1,463 cuts announced through May 2025.
FinTech companies announced 5,731 job cuts in May, the bulk of which cited AI in their announcements.
Entities in federal, state, and local Government announced plans to cut 4,499 jobs in May for a total of 15,918 this year, down 94% from the 284,827 cuts announced through May 2025, when DOGE-related reductions dominated.
The Media industry announced 436 cuts in May, bringing the total for the year to 3,390. This is down 17% from the 4,107 cuts announced in the first five months of last year.
News, which Challenger tracks as a subset of Media and includes broadcast, digital, and print, has announced 970 cuts so far in 2026, down 6% from the 1,035 cuts announced through the same period in 2025 (see Table 5).
WHY ARE COMPANIES CUTTING?
In May, Artificial Intelligence (AI) led all reasons for job cuts for the third month in a row, with 38,579 announced cuts. It is the highest monthly total ever recorded for the reason since Challenger began tracking it in 2023, and it accounted for 40% of all cuts announced in May — up from just 7% in January, 25% in March, and 26% in April. For the year, AI has been cited in 87,714 cuts, or 22% of all 2026 layoffs, already far surpassing the 54,836 attributed to the reason in all of 2025.
Bankruptcy was attributed to 5,637 cuts in May, the highest monthly total for the reason since February 2025, when 35,172 cuts were attributed to Bankruptcy. Closings accounted for 14,546 cuts in May, and Restructuring for 9,942.
So far in 2026, Market and Economic Conditions have been cited for 69,645 cuts and Closings were attributed to 66,733. Cuts attributed to Acquisitions and Mergers have reached 11,989 year-to-date, more than six times the 1,889 attributed to the reason through May 2025.
HIRING PLANS IN 2026
Through May 2026, U.S. employers have announced 80,472 planned hires, narrowly topping the 79,741 announced at this point in 2025. Hiring announcements remain historically low by pre-pandemic standards.
Technology led May hiring with 11,250 announced positions, followed by Electronics with 3,158 and Insurance with 1,435. The Energy sector, buoyed by high oil prices, announced 800 new jobs in May, its strongest month since energy companies announced 885 planned hires in October 2025.
Year-to-date, Automotive leads all industries with 12,258 hiring plans, more than double the 4,874 announced through May 2025. Entertainment/Leisure is second with 8,796, though that figure is down sharply from a year ago. Aerospace/Defense (7,676) and Government (7,368) round out the top four.