The American labor market, already showing the tension of World trade tensionsshows the first signs of another critical problem facing workers today: artificial intelligence.
In July alone, the increase in the adoption of genetive AI technology by private employers has represented more than 10,000 job cuts, according to a report published this week by Challenger, Gray & Christmas. The Outplacement Company lists AI as one of the five main factors contributing to job losses in 2025.
The layoffs have jumped this year, adding new concerns concerning a decline in hiring after new LLABOR data showed on Friday that employers have added Only 73,000 jobs in July – Right short of analysts forecasts. Until July, companies have announced more than 806,000 job cuts in the private sector, as many people as possible for this period since 2020, said Challenger, Gray and Christmas.
Among these layoffs, the technology industry has exercised the clearest ax – private companies in the sector have announced more than 89,000 jobs, up 36% compared to a year ago. Since 2023, more than 27,000 job cuts have been directly linked to the advent of the AI, according to the company.
“The industry is reshaped by the progress of artificial intelligence and continuous uncertainty surrounding the work visas, which contributed to the reductions of the workforce,” said Challenger, Gray and Noël.
The impact of AI on hiring is perhaps the most visible among young workers. Job lists for the type of entry -level business roles traditionally available for recent university graduates decreased by 15% During the past year, according to Handshake, a career platform for generation Z employees. Over the past two years, there has been a 400% increase in employers using “AI” in job descriptions, the company noted.
While AI is already starting to reshape the functioning of Americans, for the moment, other factors have a more immediate impact on the labor market. More than 292,000 positions were eliminated this year due to cuts related to Government Department of EffectivenessY (DOGE), an initiative aimed at reducing federal expenses led by billionaire Elon Musk, Challenger, Gray and Noël.
“We see the federal budget cuts implemented by DOGE Impact non-profit and health care in addition to the government,” said Andrew Challenger, main vice-president of Challenger, Gray & Christmas, in a press release.
The layoffs are also accelerating in the vast retail sector, because prices increase the cost of business, according to Challenger, Gray and Noël. The retailers announced more than 80.00 drops until July, up almost 250% compared to the same period last year, the company noted.
“The retailers are affected by the prices, inflation and continuous economic uncertainty, causing layoffs and store closings. An additional drop in consumption spending could trigger additional losses,” said the group.
