Artificial intelligence is emerging as a significant force behind U.S. workforce reductions, according to a report released this week by outplacement firm Challenger, Gray & Christmas. The study attributes more than 10,000 job losses in July alone to employers’ adoption of generative-AI tools—making AI one of the five leading reasons cited for layoffs so far this year. Since 2023, the firm has linked over 27,000 job cuts directly to AI. The technology sector has borne the brunt, announcing 89,000 cuts through July, a 36 percent increase from the same period a year earlier. Entry-level corporate roles are also shrinking: the career platform Handshake reports a 15 percent decline in postings for recent graduates, even as references to “AI” in job descriptions have quadrupled in two years. The AI-related dismissals are part of a broader wave of restructuring. Private employers announced 806,000 layoffs in the first seven months of 2025—the highest total for that stretch since the pandemic year of 2020—with budget reductions tied to the Department of Government Efficiency accounting for 292,000 of them and tariff-squeezed retailers shedding more than 80,000 positions. While the Challenger data highlight job destruction, other research points to role evolution. A Microsoft study of 200,000 Copilot interactions suggests AI is more likely to reconfigure many information-technology positions than eliminate them outright, underscoring the mixed—and still unfolding—impact of automation on the labor market.