Report Says Thousands Have Lost Jobs to AI

Artificial intelligence (AI) is growing into a serious challenge for workers in the U.S. employment landscape. According to a recent report from Challenger, Gray & Christmas, the growing use of generative AI by private companies has triggered over 10,000 redundancies since the start of the year. 

The outplacement consultancy ranks AI among the top five causes of layoffs this year. The latest labor statistics reveal that employers added just 73,000 roles in July—far below what analysts had expected. For the first seven months of the year, private-sector job cuts crossed 806,000, marking the highest total in that period since 2020, based on Challenger, Gray, and Christmas figures. 

Tech companies bore the brunt, with firms in the sector declaring more than 89,000 layoffs as of July—an increase of 36 percent compared to 2024. AI alone has been tied to over 27,000 job eliminations in the technology space since 2023. “The industry is undergoing a transformation driven by AI advancements and lingering uncertainty around the visa process, both of which have forced staff reductions,” the report states. 

The consequences of AI-driven disruption are most evident among younger employees. Handshake, a career platform serving Gen Z job seekers, reports that entry-level corporate job ads, once typical landing spots for recent grads, have dropped 15 percent over the last year. Meanwhile, the number of employers including “AI” in their job postings has climbed by 400 percent over two years.  

Although AI is beginning to alter workplace dynamics in the U.S., other forces continue to exert a more immediate effect on the job market. The report shows that over 292,000 roles have been removed due to spending cuts tied to the Department of Government Efficiency initiative, launched by Elon Musk to reduce federal costs. 

Andrew Challenger, the firm’s senior VP, noted that the budget reductions are extending beyond government agencies, hitting health-care and non-profit organizations alike. 

At the same time, layoffs have accelerated in retail, where rising costs from tariffs and renewed economic instability are squeezing margins. Retail employers have announced over 80,000 job cuts since January—an almost 250 percent spike compared to the same period in 2024. 

“Inflation, tariff pressures, and lingering uncertainty about the economy are leading to store closures and layoffs,” the firm observes. It warns that a further downturn in consumer spending could drive even more losses in the sector. 

It isn’t all doom and gloom for the job market in the wake of artificial intelligence. Many companies, such as Thumzup Media Corp. (NASDAQ: TZUP), are utilizing AI to augment employee productivity, so AI is having a nuanced effect within the employment space. 

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