At a Glance

  • Artificial intelligence became the top reason for announced layoffs in the United States in March 2026, accounting for about a quarter of all job cuts that month, according to a report released Thursday by outplacement firm Challenger, Gray & Christmas.
  • The report showed that U.S. employers announced 60,620 layoffs in March, up 25% from February. Of that total, 15,341 job cuts were attributed to AI.
  • "Companies are shifting budgets from headcount to AI investments," said Andy Challenger, chief revenue officer of the Chicago-based firm, in the report. "The actual replacement of jobs is especially evident in the tech sector, where AI can now handle some coding tasks. Other industries are testing the boundaries of this new technology. While AI cannot fully replace jobs, it is certainly causing job losses."

In-Depth Analysis

The report showed that the tech industry announced 18,720 layoffs in March, the highest among all sectors, bringing the sector's total for the first quarter of 2026 to 52,050, a 40% increase from the same period last year. Challenger noted this was the tech sector's highest first-quarter total since 2023, when the industry recorded 102,391 layoffs in the same period.

Dell Technologies said last month that it had 97,000 employees as of January 30, 2026, down from 108,000 a year earlier. In its 10-K filing, the company stated: "Throughout fiscal 2026, we remained committed to disciplined cost management aligned with our ongoing business modernization initiatives and continued to take cost-reduction actions, including workforce restructuring, restricted external hiring, and other measures, to align investments with our announced strategies and customer priorities." Dell added: "These actions have resulted in continued declines in our overall headcount. Despite difficult decisions, we remain committed to empowering our employees and attracting, developing, and retaining talent."

Meanwhile, the Challenger report noted that Oracle reportedly began layoffs late last month, though specific numbers have not yet been disclosed, and Meta is conducting layoffs within its Reality Labs division while increasing AI investment. The report said: "There may be more layoffs in the tech sector in 2026."

Despite the surge in monthly layoffs, March job cuts were still down 78% year over year. Public sector layoffs have decreased significantly, totaling 2,270 year-to-date compared to 279,445 during the same period last year, when the Department of Government Efficiency (DOGE) was a major driver of job cuts.

The latest report also showed that hiring plans rose sharply to 32,826 in March, up 157% from February and 149% year over year. However, year-to-date hiring totals (50,887) remain slightly below the 53,867 recorded in the same period in 2025. In addition to AI, other major drivers of layoffs last month included business closures, organizational restructuring, and economic conditions.