In early February, before artificial intelligence became the reason American employers gave most often for cutting jobs, Andy Challenger, whose firm counts those cuts, warned against reading too much into it. "It's difficult to say how big an impact AI is having on layoffs specifically," he said in the firm's report on January. "We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it."
Eight months on, the word has slipped down the list. Challenger, Gray & Christmas, an outplacement firm (employers pay it to help the staff they lay off find new work), publishes a monthly tally of announced US job cuts. It recorded 43,281 cuts in September, the lowest September since 2022. AI was the fifth reason given, at 3,961 cuts, about 9 percent. One tempting reading is that the AI panic is over. The other is that companies are still cutting for AI and calling it something else. I went through all nine of this year's reports to see which reading the numbers support. Neither, quite.
Start with the shape of the year. AI ranked fifth in January, at 7 percent of cuts, and fifth again in February, at about 10 percent. It led for five months, March through July, and peaked in May at 38,579 cuts, which the firm put at "40% of all cuts announced in May." Then in August it fell to fourth, at 3,462 cuts, and in September it slipped to fifth even as its count rose. Of the 120,136 AI-cited cuts so far this year, 100,409 were announced in those five months. That is why AI still tops the year to date, at about 21 percent.
Is AI now hiding under another name? I cannot show that, and nothing in the nine reports or the coverage I checked shows it has happened. Market and economic conditions led September with 8,789 cuts, 20 percent of the month, a smaller share than in June, July, or August. Cuts blamed on a downturn in demand reached 6,515, the highest monthly total since February 2023, and the same report has Washington State orchards and farm employers filing 5,396 cuts citing exactly that, which looks likely to account for most of them. Challenger himself expects announcements to say less. In July he described the swing that had already happened: "Naming AI in a layoff announcement can win over investors while pushing current and prospective employees away. That's why the messaging has swung from hedging to aggressively citing it." Then he looked ahead: "As regulations start to take shape, companies will be even more careful in their announcements, which would make tracking the impact of AI on jobs more opaque."
Technology companies announced 10,799 cuts in September. Even if every AI-cited cut in the country came from tech, at least 6,838 tech jobs went for some other stated reason. The same test in August gives at least 2,641. The report gives no reasons for the tech cuts.
That gap is the point. The AI line in the Challenger count records what is said when a cut is announced, usually by the employer, not what did the cutting. The July report shows it with a hospital. Montefiore, a hospital system in the Bronx, eliminated 12 nursing positions in utilization review, the work of showing insurers that patients' care is medically necessary, after adopting software from Datavant, a company that markets AI tools, Challenger says. The nurses' union said the hospital was replacing workers with AI; a Montefiore spokesperson called the union's claims "inaccurate and misleading," Gothamist reported, and the hospital did not confirm to Gothamist that the notices went out. Because the hospital did not make clear which product it used, Challenger logged the 12 jobs as "Technological Update (possibly AI)," not AI. Visa, which I looked at in August, went in as AI. Its chief executive's memo, as CNBC reported, said AI "is also helping to accelerate this evolution and shape the way work gets done at Visa." The jobs end the same way; the column depends on what gets said, and by whom.
The strongest case against reading too much into the label also comes from Challenger. "Regardless of whether individual jobs are being replaced by AI, the money for those roles is," he said in April. On that view AI drives cuts through the budget whatever the announcement says, and a falling AI count tells us little. In September he explained the caution he sees among employers with a different list: "high energy costs, an uncertain war in Iran, a rate hike that could make hiring more expensive," and healthcare costs he expects to surge.
So read the late-summer drop for what it is: far fewer announced cuts were put down to AI. That is not proof employers stopped cutting for AI, and not proof they are doing it quietly. A tally of announcement wording cannot tell us what AI is doing to work. It was a measure of the explanation all along. The figure that does not depend on the wording sits at the top of the same report: 573,195 announced job cuts this year, whatever they were called. That is down 39 percent from the first nine months of 2025, mostly because government cuts fell from 299,755 to 23,010. Excluding government, cuts are down 15 percent.
