U.S. Layoffs Fall to Two Year Low as AI Leads Job Cuts for Fifth Straight Month
U.S. employers announced 33,429 job cuts in July, the lowest monthly total in two years, even as artificial intelligence remained the leading reason companies cited for layoffs for the fifth straight month, according to Challenger, Gray & Christmas.
The July total fell 27 percent from June and 46 percent from the same month last year. Through July, employers have announced 477,033 job cuts, down 41 percent from the first seven months of 2025.
The report offers a mixed labor-market signal. Overall layoffs are cooling, but the pressure remains concentrated in technology. Tech companies announced 9,867 cuts in July, bringing the sector’s 2026 total to 149,023. That is up 67 percent from the same point last year, and technology now accounts for 31 percent of all job cuts announced this year.
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AI was cited for 10,970 cuts in July, or 33 percent of the month’s announced reductions. Challenger said AI has now been cited in 112,713 job cuts this year, about 24 percent of all announced cuts.
Hiring also improved. Employers announced plans to add 16,095 workers in July, up 47 percent from June and the strongest July total since 2022. Challenger said hiring plans are up 25 percent from the same point last year.
That makes the practical consequence more nuanced than a simple AI layoff wave. The report suggests AI is changing where companies cut and hire, especially in tech, while other sectors show signs of stabilization.
The social reaction so far reflects that split. Market feeds quickly amplified the report, AI-focused accounts highlighted the fifth straight month of AI-led cuts, and at least one LinkedIn commenter described the report as encouraging.
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