Artificial intelligence is already eliminating thousands of jobs monthly across the U.S., with over 10,000 positions lost to AI adoption in July alone, according to a new report from outplacement firm Challenger, Gray, and Christmas. The findings underscore how AI has rapidly become one of the top five drivers of job losses this year, reshaping entire industries while the broader job market faces mounting pressures from trade uncertainty and economic headwinds.
The big picture: AI-driven job displacement is accelerating across multiple sectors, with technology companies leading the cuts at over 89,000 announced job reductions—a 36% increase from last year.
- More than 27,000 job cuts have been directly attributed to artificial intelligence since 2023, as companies increasingly turn to AI tools instead of hiring new workers.
- The broader job market added only 73,000 positions in July, far below forecasts, while private sector companies announced over 806,000 job cuts through July—the highest for that period since 2020.
Who’s most affected: Entry-level workers and recent college graduates are bearing the brunt of AI-related displacement, facing a particularly challenging job market.
- Corporate entry-level roles typically available to recent graduates have declined by 15% over the past year, according to Handshake, a career platform.
- The use of “AI” in job descriptions has surged 400% during the last two years, signaling widespread integration across industries.
What they’re saying: Corporate leaders are acknowledging AI’s workforce impact while experts point to broader economic factors driving the shift.
- “We are seeing the federal budget cuts implemented by DOGE impact non-profits and health care in addition to the government,” said Andrew Challenger, senior vice president at Challenger, Gray, and Christmas.
- Amazon CEO Andy Jassy stated that AI would “reduce our total corporate workforce as we get efficiency gains,” though he didn’t specify a timeframe.
- Ford CEO Jim Farley reportedly plans to replace “literally half of all white-collar workers in the U.S.” with AI solutions.
Why companies are choosing AI over hiring: Economic uncertainty and cost pressures are pushing businesses toward technology investments rather than human capital.
- “There’s basically a blank check to go out and buy these AI tools,” explained Josh Bersin, CEO of The Josh Bersin Company, a workforce consultancy.
- “Then they go out and say, as far as head count: No more hiring. Just, ‘stop.’ So that immediately freezes the job market,” Bersin added.
Beyond tech: Other sectors are experiencing significant job losses due to multiple economic pressures beyond AI adoption.
- Retailers announced over 80,000 cuts through July, an increase of nearly 250% compared to the same period last year, driven by tariffs, inflation, and economic uncertainty.
- More than 292,000 roles were terminated following cuts connected to the Department of Government Efficiency (DOGE), previously led by Elon Musk.
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