Challenger data shows 139,156 technology cuts through June, up 83% year over year, with artificial intelligence the leading stated reason for four straight months

American employers announced 443,604 job cuts through the first half of 2026, and the technology sector accounted for close to a third of them, according to Challenger, Gray & Christmas.

Technology firms announced 139,156 cuts through June, an 83 percent increase over the 76,214 announced in the same period of 2025. Artificial intelligence ranked as the top stated reason for job cuts for a fourth consecutive month in June, cited in 101,743 announcements year to date — about 23 percent of all cuts.

“Tech remains the epicenter of this year’s cuts,” Andy Challenger, chief revenue officer at the Chicago-based firm, said in the report, describing AI as the dominant force as companies restructure around it, automate roles and shift budgets toward new capabilities.

The headline total is down, and that needs context

The 443,604 figure compares with 744,308 through the first half of 2025. That 40 percent decline is real but misleading: the year-earlier period was inflated by federal workforce reductions under the Department of Government Efficiency. Stripping that out, the current total is the second-highest January-to-June figure since 2020.

Second-quarter cuts came to 226,242, up 4 percent from the 217,362 announced in the first quarter and down 9 percent from the second quarter of 2025.

June itself was quiet. Employers announced 45,849 cuts, down 53 percent from May and the lowest monthly total since December 2025. Challenger attributed the cooling to the normal summer pattern while noting the cuts that did occur stayed concentrated in technology.

The AI share has climbed steeply

The trajectory within the year is the more revealing number. AI accounted for 40 percent of all cuts announced in May — up from 7 percent in January, 25 percent in March and 26 percent in April. In June it was cited in 14,029 cuts, or 31 percent of the month’s total.

For the full year 2025, AI was attributed as the reason in 54,836 cuts. The 2026 count passed that figure by May.

Other stated reasons trail well behind. Market and economic conditions accounted for 12,470 June cuts and 82,115 year to date. Closings accounted for 11,837 in June and 78,570 for the year. Restructuring was cited for 2,412, and loss of contract for 1,696.

Who has been cutting

Companies citing AI in layoff announcements this year include Cloudflare, Snap and Block. Block announced in February it planned to shed roughly 4,000 positions, close to half its headcount.

The payments sector has been particularly active. Visa said Tuesday it is cutting about 2,600 jobs, roughly 7 percent of its global workforce, with the reductions falling on technology and product teams. Visa had approximately 34,100 employees at the end of its most recent fiscal year. Mastercard announced plans earlier this year to cut 4 percent of its global workforce.

Networking has seen repeated rounds. Cisco announced plans to cut about 4,000 jobs to refocus on AI, following an earlier reduction of roughly 4,200 staff.

Hiring is not collapsing

One counterpoint deserves weight. Employers have announced plans to hire 91,405 workers so far this year, ahead of the 82,932 announced through the first half of 2025. Combined with a run of solid employment reports and stronger-than-expected job openings data, that points to a labor market with real underlying strength.

Even so, hiring announcements remain historically low relative to pre-pandemic norms. The pattern analysts have described as low-fire, low-hire is largely intact — companies are neither shedding staff broadly nor absorbing new workers at previous rates.

Energy has been one bright spot, announcing 800 new jobs in May on the strength of high oil prices, its best month since Challenger began tracking the sector.

What this means for tri-state employers

Three practical takeaways.

First, the AI attribution is partly a communications decision. When a company frames a reduction as AI-driven restructuring rather than a response to weak demand, it tells investors a growth story instead of a contraction story. The reductions are real; the stated reason is chosen. Read announcements accordingly.

Second, the hiring side is where the opportunity sits. Experienced technology and product talent is entering the market in volume — 139,156 people from that sector alone in six months. For mid-sized firms across the region that have historically lost candidates to large-cap tech compensation, this is the most favorable hiring environment in several years.

Third, if you are evaluating AI tools for your own operation, the honest question is what the technology actually replaces. Challenger’s data shows large companies concluding it replaces content, support, data entry and routine coding work. That conclusion is being drawn at scale by firms with substantial budgets to test it — which is information worth having, whether or not you reach the same answer.

Challenger’s next monthly report covering July is due in early August.

JBizNews Desk | Chicago

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