Much as it pains me to be the bearer of good news, job cuts were subdued in America last month, when AI replacement took a backseat to more mundane explanations for what layoffs there were.
Employers tipped 52,881 job cuts in August, Thursday’s update from Challenger, Gray & Christmas showed. That was up from the prior month but down almost 40% from the same period last year. It was also the lowest total for any August in four years.
As the figure below shows, job cut announcements have now fallen on YoY basis in six of the last seven months.
Even excluding the DOGE distortion, layoff announcements are down 15% YTD in 2026 versus the January-August period in 2025. Indeed, the YTD total is the lowest for the January-August window since 2022.
The bad news (the silver lining for bears, if you will) is that although hiring plans rose from August 2025’s anomalously low figure, the series doesn’t reflect a sense of urgency, or even purpose, among employers to fill what, according to the BLS anyway, are nearly 7.3 million open positions.
“What we’d like to see with low layoffs is an increase in hiring activity,” Andy Challenger said Thursday. “While companies are making plans to hire more workers than last year, it doesn’t appear those positions are being filled quickly.”
Thursday’s release reflected plans to hire 12,325 new workers, down from the prior month. The figure above shows you YTD hiring plans. Although the highest since 2023, the 119,825 cumulative total’s well below prior years.
We’re coming up on the seasonal hiring boom. September’s typically the biggest month for holiday hiring, and 2025 was a massive disappointment on that score, with just 117,313 announced hiring plans. Typically, September shows something closer to half a million (far more in 2021 and 2020, amid re-openings and “stimmy”).
The top reason cited for layoffs in August was restructuring. I know, I know: “Boorrrrring.” AI was blamed for just 3,462 of last month’s announced layoffs, the fewest since January.
But one month doesn’t change the trend. The figure below, updated with Thursday’s data, shows you the YTD layoff excuse leaderboard.
AI remains the leading reason for layoffs for 2026 as a whole, accounting for around 22% of job cut announcements.
My guess is that share will grow in the coming years, particularly as we expand the definition of what counts as a job “replaced” by AI.
Coming full circle, Thursday’s release from Challenger underscored the “low hiring, low firing” characterization of the US labor market.
I have seen very few examples of ai being used to replace jobs in the ai presentations I have seen so far. The use cases which may reduce employment are mostly how to get more productivity out of experienced workers.
And increasing that productivity everyone seems to want, is going to wear out those workers left behind. Rising productivity is the most evil concept economics has ever created. My daughter’s CEO is taking 60-70 hours every six days – that’s rising productivity and she is already trying to quit as the firm’s most “productive” employee.
I do get that ai burnout is a very real thing. The ai requires lots of hand holding as it makes lots of mistakes. It also generates gobs of content to wade through. However it is only less smart than the person generating the inputs.