AI Layoffs Already Have Surpassed Last Year’s Total. Tech Workers Are Being Cut First.
AI-driven layoffs in 2026 have already surpassed the total from all of 2025, with tech companies like IBM, Qualcomm, and NVIDIA cutting jobs amid slowing cloud and chip demand. May saw tech account for nearly 40% of all job cuts, while weekly unemployment claims rose, signaling economic strain despite strong overall hiring numbers.
The AI boom has triggered a wave of layoffs, with more than 87,000 job cuts linked to artificial intelligence in 2026—already exceeding last year’s total by mid-year. Challenger, Gray & Christmas data, cited on CNBC’s *Closing Bell Overtime* on June 4, highlights how tech roles are being disproportionately affected, even as companies like NVIDIA drive record market valuations. May’s jobs report showed nonfarm payrolls rising by 172,000, but tech accounted for nearly 40% of all layoffs that month, the highest since August 2025. IBM and Qualcomm face pressure from slowing cloud and chip guidance, with Qualcomm’s shares dropping 10% on June 5 due to AI-related challenges. The Dow also fell over 400 points, driven by losses in IBM and Cisco Systems. Weekly unemployment claims increased to 225,000 for the week ending May 30, up 35,000 from the prior month, despite steady hiring in business services. Experts note that announced layoffs may reflect broader workforce restructuring rather than permanent eliminations, but the trend suggests companies are tightening headcounts ahead of economic uncertainty. Even non-tech firms like Starbucks are adopting AI-driven workforce optimization, tying tech-team bonuses to AI usage and planning $400 million in restructuring costs. The shift signals that AI’s impact on employment extends beyond pure-play tech companies. The labor market is showing a two-speed dynamic, with high-paying tech jobs—often earning well above the $37.53 average hourly wage—being disproportionately affected. Displaced engineers, many earning significantly more than the national average, could dampen consumer spending, while the University of Michigan’s consumer sentiment index fell to 49.8 in April, nearing recessionary levels. Apple is set to unveil its latest AI advancements at the Worldwide Developers Conference, further emphasizing the sector’s rapid evolution. As AI reshapes industries, the job market faces growing volatility, with tech workers bearing the brunt of restructuring efforts.
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