Firms on AI spending spree: US tech companies cut most jobs in nearly 2 years

US technology companies in May announced the most job cuts in nearly two years as they ramp up spending on AI.

The tech sector said last month it planned to eliminate 38,242 positions, the most since August 2024, according to data from outplacement firm Challenger, Gray & Christmas. So far this year, the industry has announced 123,653 cuts, up more than 65% from the same period in 2025.

Total private-sector job cut announcements, meanwhile, were down 7% over the past five months versus the same period a year earlier, reinforcing the picture of an ongoing "low-hire, low-fire" environment in most industries.


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"The labour market is being reshaped by technology in real time," said Andy Challenger, the company's chief revenue officer. "AI is now the leading reason companies give for cutting jobs."

The figures jibe with recent high-profile, AI-related workforce reduction plans announced by companies including Meta Platforms Inc., Intuit Inc. and Cisco Systems Inc. Filings for unemployment insurance, however, haven't meaningfully increased despite the slew of layoff announcements, which have mostly been targeted at white-collar positions.

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While tech firms announced the most cuts, they also boasted the biggest hiring plans of any sector, according to the Challenger report. Across all sectors, US employers have announced 80,472 planned hires so far this year, the figures showed - better than in 2024 and 2025 but still well below totals for the same period in each year from 2019 to 2023.

The government's monthly jobs report, due Friday, is expected to show employers added 85,000 jobs in May.