September 28, 2026
AI became the top cited reason for layoffs in the US: 116,175 announced job cuts
From January through August 2026, US employers cited AI as the reason for 116,175 job cuts, or 22% of all announced layoffs.
Challenger collects employer announcements that cite AI as a reason for layoffs. AI had previously led the reasons for cuts for five consecutive months, starting in March. In August, companies cited AI as the reason for 3,462 layoffs: fourth among monthly causes and the lowest figure since December 2025.
How companies cut staff. In February, Block announced it would cut its workforce from more than 10,000 to fewer than 6,000 people. Jack Dorsey linked this to its own AI tools: he said a smaller team could do more. Block uses AI for decision-making, risk management, product development and customer service.
The next Challenger report will show whether AI returned to the top cause of layoffs after the August decline.