Is the 'jobpocalypse' finally here?
Artificial intelligence has been cited as the top reason for job cuts for the third month in a row, according to a new report, amid warnings that organisations may just be using the technology as a scapegoat for layoffs.
Research from Challenger, Gray & Christmas revealed that AI has been cited in 38,579 job cuts announced for the month of May.
This is equivalent to 40% of all the 97,006 job cuts that were announced in May, a significant surge from just seven per cent in January.
Overall, AI has been cited in 87,714 job cuts since January, or 22% of all 2026 layoffs, surpassing the 54,836 job cuts for the entirety of 2025 that were attributed to AI.
"The labour market is being reshaped by technology in real time. AI is now the leading reason companies give for cutting jobs and the primary industry citing it is Technology," said Andy Challenger, labour and workplace expert and chief revenue officer of Challenger, Gray & Christmas.
The findings come amid previous warnings from experts that AI will be costing employees jobs, with the World Economic Forum estimating that AI will displace 92 million positions worldwide.
But Challenger noted that their findings do not indicate the "jobpocalypse" that others have been warning about.
"Like spreadsheets and email before it, the technology will ultimately make workers more productive, but our data shows companies are already acting on it, citing AI for more cuts than any other reason," Challenger said.
"The open question isn't whether AI changes the workforce, but how fast."
Warning of AI washing
The findings also come as experts warn that there are some organisations that are likely using AI as a scapegoat for their job cuts.
OpenAI CEO Sam Altman earlier this year shed light on this practice by some organisations, which has been dubbed "AI washing."
"I don't know what the exact percentage is, but there's some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there's some real displacement by AI of different kinds of jobs," Altman previously told CNBC.
A Forrester report earlier this year also sounded the alarm on this practice.
"Many companies announcing AI-related layoffs do not have mature, vetted AI applications ready to fill those roles, highlighting a trend of 'AI washing' – attributing financially motivated cuts to future AI implementation," it said.
Other factors for job cuts
Challenger noted that their findings indicate restructures in organisations that are trying to prepare for an AI-driven economy.
Since January, Market and Economic Conditions have been cited for 69,645 cuts, while Closures were attributed to 66,733 cuts, according to the report.
Acquisitions and Mergers have been cited in 11,989 job cut announcements since January, more than six times the figure during the same period last year.
"On top of the headline AI story, we're seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy," Challenger said.
