Job losses due to AI are real and are wreaking havoc on the technology industry.
U.S. technology layoffs are now at their worst year-to-date level since 2023, according to a new report from Challenger, Gray & Christmas. U.S.-based tech companies have announced 52,050 layoffs by 2026, including 18,720 layoffs in March, according to an outplacement firm. This first quarter number was up 40% year over year.
“Companies are shifting budgets toward AI investments at the expense of jobs,” Challenger said in a release. “We’re seeing real role replacement in technology companies, where AI can replace coding functions.”
Challenger said AI was the main reason for layoffs across the industry, accounting for 25% of overall layoffs in March.
Overall, Challenger said U.S.-based employers announced 60,620 layoffs in March, down 78% from the same period a year ago, and overall layoffs fell year over year in the first quarter.
The company expects more layoffs by technology companies in 2026.
This technology division total does not include Oracle’s recent layoffs, and the software maker has not yet disclosed the total number of employees affected. Business Insider found that dozens of Oracle employees posted on their LinkedIn pages that they were participating in the layoffs.
“My personal take on this is it’s not a good time to be in the tech industry,” a former Oracle employee told Business Insider earlier this week. “That’s not true.”
Oracle did not mention AI in the layoff notices sent to employees, but the move is widely seen as an effort to contain costs as it continues its massive AI ramp-up.
Executives at Australian-American software companies Atlassian, Block and IBM all cited AI in their decisions to cut jobs.
There is intense debate about how much responsibility AI bears.
Whether AI is to blame for attrition is a matter of debate, especially among creators of AI models., Advances in generative AI, such as OpenAI, are accelerating the current situation.
Sam Altman, CEO of OpenAI, said some companies are doing “AI cleaning” by blaming technology for layoffs, but he doesn’t know to what extent.
Other AI leaders, including Anthropic CEO Dario Amodei, have long warned about job losses due to AI. Despite criticism from some of his peers, Amodei said he expects up to half of entry-level white-collar jobs to be eliminated by AI over the next one to five years.
Cathy Ross, senior director analyst at advisory firm Gartner, recently told Business Insider that AI likely hasn’t directly taken away jobs yet.
“AI may have played a role, but it’s not necessarily the result of AI success,” Ross said. “Rather, the job cuts appear to be part of a broader strategy to reinvest funds in AI in hopes of future success.”
Challenger said AI Even if they cannot be completely replaced, there is a cost to employment. ”
“One thing is clear: AI is changing jobs and the workforce,” the company said. “Employees will need to become more strategic as they lead AI-powered agents to handle increasingly complex tasks. In the age of AI, human employees will need strong decision-making and judgment skills.”