For the second consecutive month, artificial intelligence stands at the forefront as the primary reason companies cite for layoffs, making up over a quarter of job eliminations in April. This revelation comes from a recent report by the outplacement firm Challenger, Gray & Christmas.
In April alone, there were 21,490 job cuts attributed to AI, which constitutes 26% of the total 88,387 layoffs for the month. This marks the second month in a row that technology has been the leading factor in workforce reductions.
While AI frequently shoulders the blame for job losses and diminishing entry-level positions, some critics argue that it shouldn’t be seen as the sole culprit. Interestingly, several companies have experienced stock market gains following their strategic pivot to AI. A notable example is Allbirds, a footwear company whose stock prices soared approximately 600% after announcing its shift from footwear to AI-focused initiatives.
Amidst the rising influence of AI, overall job cuts saw a 38% increase in April compared to March, as reported by Challenger. The technology sector bore the brunt of these reductions, with 33,361 positions eliminated.
In response, numerous tech companies have indicated that they are reallocating funds from labor to invest more heavily in AI development.
“Whether or not individual jobs are being replaced by AI, the financial resources for those roles certainly are,” commented Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, in a statement.
Other reasons for job cuts
Other factors are driving layoffs, including President Trump’s evolving tariff agenda and the Iran war, Challenger said. Throughout 2026, “market and economic conditions” was the most cited reason, accounting for 53,058 cuts, the company found.
In April, company closures were the second most common reason for job cuts, followed by cost-cutting.
Other data suggests AI is affecting some white-collar jobs. In past automation cycles, blue-collar workers were more likely to bear the brunt.
Data from the U.S. Bureau of Labor Statistics offers some evidence of AI-related job losses, according to Yardeni Research President Ed Yardeni. Layoffs in professional and business services — sectors vulnerable to AI — rose by 150,000 in March from a year earlier.
Still, Yardeni and other economists say AI could eventually create jobs by driving demand for new roles that did not exist just a few years ago.
