U.S. tech companies announced 38,242 job cuts in May 2026, the sector’s highest single-month total in nearly two years and more than any other industry, according to outplacement firm Challenger, Gray & Christmas. The figure pushed tech’s 2026 running total to 123,653 — up more than 65% against the same stretch of 2025 — even as tech simultaneously held the largest announced hiring plans of any sector for the year. Across the full U.S. economy, employers disclosed roughly 97,000 cuts in May, up from 83,387 in April, with transportation a distant second at 6,909 and services third at 6,268. AI was the most-cited reason for layoffs across all industries for the third consecutive month.
The figures arrive as the same companies cutting most aggressively are committing historic sums to AI infrastructure. Google, Amazon, Microsoft, and Meta together plan roughly $725 billion in capital spending in 2026, up 77% year-on-year, with around three-quarters targeted at AI servers, GPUs, and data centers. Meta CEO Mark Zuckerberg attributed the company’s roughly 8,000 job cuts directly to AI infrastructure costs, while Challenger has logged AI as a factor in more than 49,000 planned cuts through April. The displacement case is nevertheless contested: unemployment claims have not risen in step with the announcements, and May payrolls — due Friday — are projected to show 85,000 jobs added. Challenger ranks AI third among stated cut rationales behind market conditions and restructuring, and notes that AI spending is so far absorbing the budgets for eliminated roles more often than the roles themselves. OpenAI CEO Sam Altman has separately accused some employers of “AI washing” — using AI as cover for reductions that would have happened regardless.