The U.S. information sector's layoff rate jumped to 2.3% in June, its highest level in at least two decades, as employers cut 63,000 jobs. Oracle and Microsoft accounted for the biggest job losses, with Oracle explicitly citing AI deployment in its 10-K, while Cisco and Intuit redirected labor savings into AI infrastructure. Outplacement tracker Challenger, Gray & Christmas found AI cited in nearly a quarter of 2026's job cuts.
The information sector's layoff rate jumped to 2.3% in June, according to Bureau of Labor Statistics data — a level that surpasses the peaks reached during the 2008 financial crisis and the 2001 recession. Employers cut 63,000 workers during the month, the third-highest monthly total since April 2020.
It has more than doubled since November. As a result, the six-month moving average now stands at 2.0%, its second-highest reading on record.
Oracle and Microsoft Lead the Cuts
Oracle eliminated 21,000 jobs, about 13% of its workforce and fully a third of the quarter's total cuts, citing AI deployment directly in its 10-K filing. Microsoft cut roughly 4,800 positions, or 2.1% of its global workforce, following a July announcement.
Smaller companies posted even steeper percentages. Groupon is cutting up to 400 positions, nearly 25% of its workforce, while ClickUp eliminated 22% of its staff.
Two Ways AI Is Cutting Payrolls
Some reductions come from direct automation, as AI adoption replaces tasks employees once performed. Others stem from capital reallocation: Cisco redirected roughly 4,000 eliminated positions toward AI, silicon, optics and security. Intuit's 3,000-job reduction, 17% of its workforce, similarly targeted organizational complexity while shifting resources toward AI initiatives.
Either way, the outcome looks the same to investors. If a company generates more revenue with fewer workers and redeploys the savings into AI infrastructure, labor becomes a smaller share of the business.
AI Gets Credit for Nearly a Quarter of 2026's Job Cuts
Outplacement firm Challenger, Gray & Christmas found AI was cited in 40% of announced U.S. job cuts in May, its highest share on record, before accounting for 31% of cuts in June. Through June, AI had been cited in 101,743 announced cuts, or 23% of the year's total.
Yet some of that credit may be overstated. Companies have an incentive to describe layoffs as AI transformation rather than ordinary cost-cutting, since an AI narrative can signal productivity gains that plain cost-cutting does not.
For technology workers in 2026, AI is destroying jobs faster than it is visibly creating them.
Source: 24/7 Wall St.
Trading involves risk.
Risk Disclaimer
