If you work at a company dedicated to developing advanced AI models, or if your job description entails integrating those models into your company’s processes and procedures, be apprised: You may be engineering yourself into obsolescence.
Thursday’s update from Challenger, Gray & Christmas showed tech companies remained the biggest source of layoffs by sector in America last month. Not coincidentally, AI was the leading excuse for job cuts. Again.
Management cited AI in announcing nearly 11,000 cuts in July, taking the YTD total to 112,713. That’s the number of people “officially” replaced by AI or, in some cases, deemed superfluous in the context of making room in the budget for AI spending. (As the Challenger release put it, there’s considerable “ambiguity” about “what constitutes AI-attributed cuts.”)
As the figure shows, the share of overall layoff announcements in 2026 attributed to AI is up to 24%. That figure was 23% in June.
“Tech remains the center of gravity for this year’s cuts, and AI is still the reason companies give,” Andy Challenger said Thursday.
So far this year, tech companies have announced nearly 150,000 job cuts, up by two thirds since the same period a year ago. The sector was responsible for more than one in every three announced layoffs through July.
The good news is, overall, economy-wide layoffs last month were just 33,429 on Challenger’s count. That’s a two-year low and down by almost half from July of 2025.
Challenger called the deceleration in the pace of overall layoffs “dramatic.”
In other encouraging news, hiring plans picked up to 16,095, a fivefold increase versus July of 2025 and the most for any July since 2022. Not surprisingly under the macro-geopolitical circumstances, hiring plans were concentrated in defense, energy and tech which, together with automotive, comprised nearly 70% of the total.
The bottom line, Challenger said Thursday, is that at least for now, “AI is shifting the labor market, not dismantling it.”
Apropos of nothing, does anyone know a good wheelwright? My buggy’s got a bum spoke.
No job is safe, and it hurts to get fired. Every human knows that. My best to all.
When you get that spoke fixed, I have some buggy whips out in the shed you might want.
Thanks a lot, HAL
I am reminded of Andreeson’s ‘techno-optimist’ screed from a few years ago. Everything about it now reads “The Ruling Class will be more than fine! Rejoice!” “Techno-optimism” today reads more properly as “techno-feudalism”. In other words, if you are already worth a few hundred-million, things will certainly get much better for you as AI requires you build physical walls around your mansion and that your bunker is full of 100, 5gallon buckets of dry mac and cheese survival rations. https://a16z.com/the-techno-optimist-manifesto/
Aside for discovering some interesting and unique proteins, the entire AI value-prop relies on mass disemployment. So maybe some day you will be cured of cancer but in debt for a century. Or, what Musk and Thiel really want, an immortality drug anyone is free to purchase. For $10 billion a year.
Beyond layoffs, AI likely means “drones, bio hazardous chemicals and nuclear energy”.
No one seems too worried about all of the heat these data centers produce 24/7 either. Nor the carbon footprint they create from all of the energy they consume just running and cooling them. Meanwhile, Europe, Canada, and Washington State are all on fire; the Midwest, East Coast, and France have all endured massive heat waves; the Danube and Colorado rivers are running on empty; and there is a Super-Duper El Niño brewing out in the Pacific the likes of which we have not seen since 1877. And remember this: under Donald Trump, FEMA doesn’t really take calls anymore. (Altadena and the Pacific Palisades are still waiting!) Let’s hope this hurricane season is a mild one.
The sequel to “Guns, Germs and Steel”.