Although it wasn’t until early 2023 that AI in general would become part of the global conversation, the current artificial intelligence revolution can be traced back to the release of ChatGPT 3.5 in November 2022.
Ever since then, other than the technology’s energy consumption, the most controversial part of the discussion about AI has been its inevitable impact on employment.
OpenAI CEO Sam Altman was one of the biggest proponents of the coming AI-induced jobs apocalypse, posting comments on Reddit such as, “I’m happy to say that I am convinced that the job destruction in the next couple of decades is going to be massive.”
He even went as far as saying, “My job is to help people destroy jobs.”
While Altman has had a change of heart on the topic recently, AI’s aggressive posture toward employment has led CEOs across numerous industries to gut their workforces in the name of the technology.
On Tuesday, June 23, yet another tech giant said it cut tens of thousands of jobs last year because of AI.
Oracle says AI drove mass layoffs last year
On June 23, cloud infrastructure services provider Oracle made a shocking announcement. The company shed about 21,000 jobs globally as part of its plan to reshape the business around artificial intelligence.
As of May 31, 2026, Oracle says it still has about 141,000 full-time employees in its annual report, down from the 162,000 it reported a year ago.
“During fiscal 2026, our management approved, committed to, initiated and further supplemented plans to restructure to implement certain strategic measures and further improve operational efficiencies, including through the adoption and integration of AI technologies across certain functions and other operational activities,” the company said in its Securities and Exchange Commission regulatory filing, SeekingAlpha reported.
The move is part of the company’s overall “restructuring plan,” which Oracle says will cost up to $2.1 billion.
“The adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce,” the company said in the filing. About 49,000 of the company’s 141,000 global full-time employees are located in the U.S.
But the company also admits that its restructuring plan could result in “increased restructuring costs and reduced productivity,” because “these types of restructurings may also lead to shortages of sufficiently skilled employees in certain roles, loss of valuable institutional knowledge, and damage to employee morale and retention.”
One has to wonder whether all of these changes are worth it. But Oracle seems to see those potential downsides as reasonable things to risk to usher in more artificial intelligence.
Oracle shares were down nearly 4% at last check Tuesday afternoon, June 23.
AI adoption drives May job losses to Covid levels
U.S.-based employers revealed more than 97,000 job cuts in May, a 16% increase from the more than 83,000 they cut the month prior and 3% higher than last year’s total, according to the latest data from Challenger, Gray, & Christmas viewed by TheStreet.
The May 2026 total was the highest for the month since 2020, when the Covid pandemic forced employers to cut nearly 400,000 positions.
The firm says it has seen “a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy,” according to Andy Challenger, chief revenue officer for Challenger, Gray, & Christmas.
The tech sector was responsible for more than a third of the job cuts, with companies announcing more than 38,000 job cuts in the month, the highest total since August 2024.
Meta, the parent company of Facebook, led the way, laying off 8,000 amid the company’s own shift toward an AI future, The New York Times reported.
For the year, the tech sector has made 123,653 job cuts, a 66% increase from the 74,716 confirmed through the first five months of 2025. The tech sector is the leading job cutter “by a wide margin,” according to Challenger.
“The labor market is being reshaped by technology in real time. AI is now the leading reason companies give for cutting jobs, and the primary industry citing it is Technology. Technology, already the year’s biggest job cutter, saw its steepest month of cuts since early 2023, even as it remains the sector with the most hiring plans this year,” said Challenger.
“AI isn’t yet the jobpocalypse some predicted. Like spreadsheets and email before it, the technology will ultimately make workers more productive, but our data shows companies are already acting on it, citing AI for more cuts than any other reason. The open question isn’t whether AI changes the workforce, but how fast.”
Employers blame AI for job cuts
Employers aren’t always honest about the reasons for job cuts. Sometimes they blame one thing for axing positions when other causes may be more pressing. But whether they are being completely truthful or not, most are blaming AI for job cuts.
AI led all reasons for job cuts in Challenger’s data for the third consecutive month, but the 38,579 AI-related job cuts in May were the highest monthly total ever recorded for the reason since the firm began tracking it in 2023. AI accounted for 40% of all job cuts announced in May, up from just 7% in January, 25% in March, and 26% in April.
So far in 2026, employers have cited AI in 87,714 job cuts, or 22% of total job cuts. That total is already well ahead of the 54,836 that were attributed to AI all last year.
But it’s not all doom and gloom, especially in the tech sector. While May’s job cuts were deepest in tech, the industry also led all others in hires.
Technology led May hiring by a large margin with 11,250 announced positions. Electronics was the next-largest hirer, adding just 3,158 jobs.
