U.S.-based employers announced nearly 76,000 job cuts in August, marking a 193% increase from the nearly 26,000 cuts announced a month before, according to a Sept. 5 report from Challenger, Gray & Christmas, Inc.
Excluding the more than 115,000 job cuts announced in August 2020, last month represented the highest August total since 2009, when more than 76,000 layoffs were recorded.
“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics,” said Andrew Challenger, SVP of Challenger, Gray & Christmas, Inc., in a statement.
“Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management,” he said. “Cuts are following a very similar trend from last year as ongoing pressures have challenged labor decisions.”
By industry, technology announced the most job cuts in 20 months, with a focus on adopting artificial intelligence (AI) and automation tools. Education, entertainment/leisure and industrial manufacturing also saw cuts higher than August 2023, while retail and media companies reported fewer cuts.
About half of job cuts in August were attributed to cost-cutting measures, and a fifth were attributed to market or economic conditions.
For the first time since April, though, employers pointed to AI as a reason for job cuts. In August, nearly 6,000 job cuts were attributed to AI, which were all in the technology industry. So far in 2024, about 7,000 cuts are due to AI, as compared with about 4,200 in 2023.
Overall, U.S. employers announced about 80,000 hiring plans, decreasing 41% from about 136,000 recorded through August 2023. The year-to-date total marks the lowest since Challenger began tracking the data in 2005, with the previous lowest total being recorded in August 2008, when about 80,400 hiring plans were announced.
The tech sector seemed to be hit particularly hard in August, with more than 26,000 layoffs announced among 48 companies — the highest level reported since 34,000 layoffs in January, according to a separate analysis. Tech companies are downsizing with a focus on “productivity, profitability and efficiency,” as well as funding AI initiatives, sources told CFO Dive.
As workers express concerns about AI potentially replacing jobs, companies can communicate their AI strategies to influence public opinion, according to a report from Bentley University and Gallup. Survey respondents said they wanted to see transparency about how AI is used in business practices, as well as clarity around data privacy and security concerns.