Core Summary

  • According to a recent report by outplacement firm Challenger, Gray & Christmas, technology-related factors such as automation led to 20,000 layoffs by U.S. employers in the first half of 2025.
  • Only 75 of those were explicitly attributed to artificial intelligence, but the analysis noted that many companies may categorize AI-related layoffs under broader headings.
  • Challenger Senior Vice President Andy Challenger told CFO Dive that companies are using the term "technology updates" more frequently than in the past decade, suggesting some AI-related layoffs may be classified under this category; some companies are reluctant to directly associate layoffs with AI to avoid media attention.

Deep Insights

According to CNBC, companies across industries such as Procter & Gamble, Microsoft, Citigroup, Walmart, CrowdStrike, and Disney have all announced layoffs in recent months. As the second half of the year begins, this trend shows no signs of slowing—Microsoft announced last week it would cut approximately 9,000 employees globally across multiple teams.

CNBC reported that amid global economic uncertainty stemming from President Trump's trade policies, many organizations face pressure to cut costs. Layoffs are in some cases being incorporated into larger cost-reduction strategies or growth plans.

A survey released by the World Economic Forum in January found that 40% of employers expect to reduce their workforce in areas where AI can automate tasks.

According to a May article by Bloomberg, fintech company Klarna has slowed its AI-related actions after concluding it overdid layoffs due to AI, highlighting the risks financial services firms face when replacing humans with not-yet-mature technology.

Challenger data shows that U.S. employers announced a total of 744,308 layoffs in the first half of the year, the highest for that period since 2020 (when the figure was 1,585,047).

The Department of Government Efficiency (DOGE) was the leading cause of layoff announcements so far this year, involving 286,679 people, including direct cuts to the federal workforce and its contractors. An additional 11,751 layoffs were attributed to DOGE's "downstream effects," such as funding losses for private nonprofits and affiliated organizations.

Market and economic conditions were the second-largest cause of layoffs, totaling 154,126 so far this year. Store, department, or factory closures led to 107,142 job losses, while restructuring efforts resulted in 64,487 layoffs.

Other drivers of layoffs include: bankruptcy (35,641 people), cost reduction (17,245), contract losses (8,893), and financial downturns (4,909). An additional 18,781 layoffs were reported without a specific reason.