AI-driven layoffs reach 7,000 in September, exceeding 17,000 year-to-date
According to a Challenger, Gray & Christmas report, AI directly led to 7,000 job losses in September 2025, with the year-to-date total exceeding 17,000. The technology sector leads in layoffs, with companies such as Salesforce explicitly attributing job cuts to AI. The overall number of layoffs reached 946,000, the highest for the same period since 2020.
Key Takeaways
- Outplacement firm Challenger, Gray & Christmas recently reported that more than 17,000 job cuts so far this year have been directly attributed to artificial intelligence, with the tech sector accounting for the largest share.
- Most of the cuts were announced in the second half of the year. In September alone, Challenger tracked7,000 AI-driven job cuts。
- "Tech companies are experiencing massive disruption from AI, which is not only leading to job losses but also making it harder to find work, especially for junior engineers," Andy Challenger, senior vice president of the Chicago, Illinois-based outplacement firm, said in the report. "Tech leaders have emphasized that AI is changing the nature of work, and more companies are requiring their teams to undergo related training."
Deeper Insights
Salesforce is one of the companies that in recent months has explicitly linked large-scale layoffs to AI-related initiatives. In an Augustpodcast interview, Salesforce CEO Marc Benioff said the company reduced its customer service staff from 9,000 to about 5,000 after AI agents began handling customer conversations.
Overall, according to the Challenger report, companies across industries have announced 946,426 job cuts so far this year, the highest level for the same period since 2020, when 2.1 million were announced. The Department of Government Efficiency was the top driver of layoffs, cited as the reason for 293,753 planned cuts so far this year, including direct reductions to the federal workforce and its contractors.
Market and economic conditions were the second most common reason for layoffs, leading to 208,227 cuts so far this year. The report noted: "This reflects employers' continued response to economic uncertainty, inflation, tariffs, and changing demand across industries." Store, division, or plant closures have displaced 144,652 people this year, up from 97,590 in the same period last year. Restructuring efforts have resulted in 100,450 cuts, while bankruptcies have led to 37,590 job losses, a significant increase from 10,700 in September 2024.
Challenger said technological updates, including automation and "possible" AI implementation, have led to 20,219 cuts in 2025. Another 17,375 cuts were explicitly attributed to AI, with 7,000 announced in September. Since Challenger released itsreportin early July, layoffs directly linked to AI have risen sharply. A Challenger spokesperson said: "We are seeing a surge in announcements from companies, mainly in the tech sector, citing AI as the reason for layoffs."