The US technology sector cut 38,242 jobs in May 2026 - a nearly two-year record. According to Challenger, Gray & Christmas, the industry’s total layoffs since the beginning of the year reached 123,653, up 65% from the same period in 2025. Yet, paradoxically, tech companies maintain the largest employment plans of any industry, and artificial intelligence remains the most frequently cited reason for cuts for the third month running.

The key players in the market - Google, Amazon, Microsoft, and Meta - plan to spend a cumulative $725 billion on capital spending in 2026, with roughly 75% related to AI infrastructure: servers, GPUs, and data centers. Mark Zuckerberg confirmed that some 8,000 cuts in Meta were a direct result of AI investment. However, the question of whether algorithms are actually replacing laid-off employees remains open: some analysts speak of "AI-laundering," when technology serves as an excuse for restructurings that would occur anyway.

Despite the wave of announcements of cuts, unemployment claims are not rising proportionally, and a pending report from the US Department of Labor may show an 85,000-job increase. This leaves the thesis of mass displacement by artificial intelligence unproven: so long as AI absorbs budgets for certain roles rather than functions themselves, and the labor market shows resilience against technological transformation.