AI-driven layoffs hit 10,000 in July as tech job cuts soar
The U.S. job market took a hard hit from artificial intelligence in July. More than 10,000 jobs were cut that month alone, driven by growing AI adoption, according to Challenger, Gray & Christmas. AI ranks among the top five causes of layoffs expected in 2025.
Tech companies led the charge with over 89,000 job cuts announced through July, a 36% jump year-over-year. Since the start of 2023, more than 27,000 layoffs have been directly linked to AI advancements.
The situation worsened with July’s hiring data showing just 73,000 new jobs added—well below analyst expectations. Overall, 806,000 private-sector job cuts have been announced in 2024, the highest since 2020.
AI is also reshaping opportunities for young workers. Entry-level corporate jobs for recent grads declined 15% over the past year. Meanwhile, AI references in job listings exploded by 400% in two years, says career platform Handshake.
The federal budget cuts led by Elon Musk’s Department of Government Efficiency (DOGE) wiped out 292,000 government and nonprofit jobs this year. Retail layoffs soared 250%, topping 80,000, hit by tariffs and inflation.
Andrew Challenger, senior VP at Challenger, Gray & Christmas said:
“The industry is being reshaped by the advancement of artificial intelligence and ongoing uncertainty surrounding work visas, which have contributed to workforce reductions.”
“We are seeing the federal budget cuts implemented by DOGE impact non-profits and health care in addition to the government.”
“Retailers are being impacted by tariffs, inflation and ongoing economic uncertainty causing layoffs and store closures. Further declines in consumer spending could trigger additional losses.”