Job cuts by U.S.-based employers plunged by 40% in the first half of 2026, compared with the same period last year. That doesn’t mean this is a light year for layoffs, though.
Rather, last year’s job-loss total in the January-June 2025 period — 744,308 — was a mainly government-driven outlier. In fact, this year’s 443,604 cuts represented the second highest first-half total since 2020, according to a new jobs report from Challenger, Gray & Christmas.
In the most recent full month, June, layoffs were down 53% from last year. That was similar to last year and typical of summer months, noted Andy Challenger, workplace expert and chief revenue officer for the outplacement and executive coaching firm.
Despite the overall decrease in job cuts this year, the technology sector is moving in the opposite direction, and with gusto. Tech firms announced 15,503 cuts in June for a first-half total of 139,156, up a steep 83% from last year.
According to the report, artificial intelligence led all reasons for job cuts, with 101,743 in this year’s first half, representing 23% of all cuts; the proportion rose to 31% in June. The second-most-common reason was market and economic conditions.
“Artificial intelligence continues to reshape how companies think about headcount,” said Challenger in the report. “AI is the dominant force as companies are restructuring around it, automating roles and reallocating budgets toward new capabilities. The sector is being reshaped in real time.”
After technology, the next sectors on the hit list were transportation (40,970), healthcare (33,175), services (2,361), and government. The latter was responsible for 288,628 job losses in last year’s first half but a comparative trickle (17,790) in 2026.
Regionally, the Western U.S. led the way with 183,400 layoffs in this year’s first half, slightly more than a year earlier. The East, which lost 421,330 jobs in early 2025, pared that number to 90,495 this year. Even the South, with 102,518, is outpacing the East this year.
Meanwhile, along with the decrease in job cuts this year, there’s been an uptick in hiring plans. In the first half, employers announced plans to hire 91,045 workers, up 10% from a year ago. The increase reverses the trend since 2020.
What the workforce will look like by year-end may depend much on what happens in September and October, which are usually the leading months for hiring. Over the last two years, U.S. employers announced plans in those months for just over 400,000 hirings in 2025 and about 670,000 in 2024.
