Artificial intelligence is already replacing thousands of jobs each month as the US job market struggles amid global trade uncertainty, the report finds.
AutPlacement Firm challengers Gray and Christmas said in a report filed this week that, in July alone, increased adoption of generative AI technology by private employers led to more than 10,000 lost jobs. The company said AI is one of the top five reasons for unemployment this year, CBS News said.
On Friday, new workers figures revealed that employers only added 73,000 jobs in July. The companies announced more than 806,000 job cuts in the private sector until July, the highest number in that period since 2020.
In the technology industry, private companies have announced more than 89,000 job cuts, making it the most intense, up 36% compared to a year ago. Challenger, Gray and Christmas have found that more than 27,000 job cuts since 2023 have directly linked to artificial intelligence.
“The industry is shaped by advances in artificial intelligence and the continued uncertainty surrounding work visas that are contributing to reducing the workforce,” the company said.
The impact of artificial intelligence is the most severe among young job seekers, with entry-level corporate roles available that usually reduces recent university graduates by 15% over the past year, according to the Career Platform Handshake. The use of “AI” in job descriptions has also increased by 400% over the past two years.
There are other reasons for recent unemployment. This concludes more than 292,000 roles after cuts related to government efficiency led by former best friend of President Donald Trump, Elon Musk.
“In addition to the government, we see federal budget cuts looking at nonprofits and healthcare,” Andrew Challenger, senior vice president, said in a statement.
The company said layoffs have also been rising in the retail sector amid rising costs related to tariffs. Until July, retailers announced cuts of more than 80,000. This was an increase of nearly 250% compared to the same period last year.
“Retailers are affected by tariffs, inflation and ongoing economic uncertainty, causing layoffs and closures. Further reductions in consumer spending could result in additional losses,” the company said.
White-collar workers are among the people at the highest risk of AI cleaning up jobs, executives warn.
However, the Challenger said earlier last month “we're not talking to too many HR leaders who say AI is replacing their jobs, although there are roles that could be significantly changed by AI right now,” NBC News added.
In June, Amazon CEO Andy Jussey said AI will “reduce the total corporate workforce as it increases efficiency.” However, he did not specify a time frame.
last month, Wall Street Journal Ford CEO Jim Farley reported that it will replace “half half of all white-collar workers in the United States.”
However, experts argue that AI is currently affecting the job market in the round market, including many companies currently under intense pressure to cut costs due to the uncertain economic situation driven by Trump's tariff policies and concerns about rising inflation. So, some companies are spending their money on AI software instead of hiring new staff.
“We basically have a blank check to go out and buy these AI tools,” Josh Bersin, CEO of Josh Bersin Company Workforce Consultancy, told NBC News.
“Then they go out and say about the number of heads. There's no more employment. Just 'stop'. So the job market will soon be frozen,” he added.
