US layoffs: Of the more than 80,000 layoffs in May, 3,900 were laid off due to AI in the tech sector

American companies announced surprising job cuts in May this year, breaking the record set in 2022, according to coaching firm Challenger, Gray & Christmas Inc.

U.S.-based employers announced 80,089 layoffs in May, compared with 20,712 in the same month last year — a massive 287% increase. In April of this year, U.S. companies shed 66,995 workers. Of the more than 80,000 U.S. workers who were laid off last month, about 3,900 — all in the tech industry — lost their jobs because of AI, according to the report.

So far this year, companies have announced plans to cut 417,000 jobs, a 315% increase compared with the 100,694 job cuts announced during the same period last year.

Consumer confidence has fallen to a six-month low, and job openings are slowing. Companies appear to be putting the brakes on hiring in anticipation of a slowdown.

Which sectors saw the most job losses?

According to a report by Challenger, Gray & Christmas, the technology sector announced the most layoffs in May – 22,887. This year, the total was 136,831, an increase of 2,939% compared to the 4,503 layoffs announced in the same period last year.

The technology sector announced its biggest job cuts since 2001, when 168,395 layoffs were announced throughout the year.

Retailers announced the second largest reduction in May (9,053). Retail has announced 45,168 cuts this year, a 942% increase from the 4,335 announced through May 2022.

The automotive sector announced 8,308 job cuts last month, bringing the total to 18,017 jobs this year, a 235% increase compared to the 5,380 job cuts announced during the same period last year.

This year there was also an increase in the number of layoffs in the banking sector. Financial firms announced 36,937 cuts through May, a 320% increase compared to 8,788 cuts during the same period in 2022.

The Health Care/Products division, which includes health care manufacturers and hospitals, announced 33,085 cuts, an 81% increase from the 18,301 announced in the sector in the first five months of last year.

The media industry has announced 17,436 cuts so far in 2023, the highest number on record.

The news media sector, which includes broadcast, digital and print media, has announced 1,972 cuts this year, dwarfing the 1,808 announced for all of 2022.

MAY EMPLOYMENT PLANS

In May, employers announced plans to hire 7,884 workers, the lowest monthly total since November 2020, when 6,527 new positions were announced. So far this year, companies have announced plans to hire 101,833 positions, down 83% from the 612,686 jobs announced through May 2022, the report adds.