AI Tops Reasons for Layoffs in April for Second Straight Month

Artificial intelligence topped the reasons companies gave for layoffs for the second month in a row. It accounted for more than one in four job cuts in April, a new report from outplacement firm Challenger, Gray & Christmas shows.

The report tallied 21,490 AI-related cuts last month. That made up 26% of the 88,387 total layoffs. It marks the second straight month that the technology has led layoff drivers.

AI-related layoffs occurred as overall job cuts climbed 38% in April from March, Challenger found. The technology sector saw the largest share, with 33,361 cuts.

Some tech firms say they are redirecting spending from labor to AI investments.

"Regardless of whether individual jobs are being replaced by AI, the money for those roles is," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in the statement.

Company closures ranked as the second most common reason for April cuts, followed by cost-cutting.

Other factors included President Trump's evolving tariff agenda and the Iran war, Challenger said. Through 2026, "market and economic conditions" led all reasons, accounting for 53,058 cuts.

Data from the U.S. Bureau of Labor Statistics points to AI-related losses in some white-collar jobs, said Ed Yardeni, president of Yardeni Research. Layoffs in professional and business services, sectors vulnerable to AI, rose by 150,000 in March from a year earlier.

Yardeni and other economists say AI could create jobs over time by spurring demand for new roles.