U.S. employers announced nearly 76,000 job cuts in August, a 193% increase from the previous month, according to a report from Challenger, Gray & Christmas, Inc. This marks the highest August total since 2009, excluding the over 115,000 job cuts announced in August 2020. Andrew Challenger, SVP of Challenger, Gray & Christmas, Inc., attributed this surge to rising operational costs, potential economic slowdown, and shifting market dynamics, leading to difficult decisions about workforce management.
AI and Automation Drive Job Cuts in the Tech Industry
The technology industry announced the most job cuts in 20 months, with a focus on adopting artificial intelligence (AI) and automation tools. For the first time since April, employers pointed to AI as a reason for job cuts. In August, nearly 6,000 job cuts were attributed to AI, all within the technology industry. So far in 2024, about 7,000 cuts are due to AI, compared with about 4,200 in 2023.
The tech sector experienced more than 26,000 layoffs among 48 companies in August, the highest level reported since January. Tech companies are downsizing with a focus on “productivity, profitability and efficiency,” as well as funding AI initiatives.
As AI continues to replace jobs, companies are urged to communicate their AI strategies to influence public opinion, with a focus on transparency about AI usage in business practices and clarity around data privacy and security concerns.
