July layoffs hit lowest level in two years despite AI fears: report

• Total 2026 layoffs through July reached 477,033, down 41% from the same period in 2025, with AI cited as the reason for 112,713 cuts since January and 184,538 cuts since tracking began in 2023
• Hiring announcements surged to 16,095 in July, up 47% from June and 400% higher than July 2025's 3,200, with aerospace, defense, energy, and manufacturing leading job creation
• Technology sector announced 149,023 layoffs in 2026 so far (67% more than 2025), but overall labor market shows strength ahead of Friday's official Bureau of Labor Statistics jobs report

Summary

US job cuts in July fell to their lowest level in two years, signaling labor market resilience despite economic headwinds, according to Challenger, Gray & Christmas. Employers announced 33,429 job cuts in July—down 27% from June and 46% lower than July 2025.

Key Figures:

• Year-to-date layoffs through July: 477,033 (down 41% vs. same period in 2025)
• AI-related job cuts: 10,970 in July; 112,713 year-to-date; 184,538 since tracking began in 2023
• Announced hiring plans: 16,095 workers in July (up 47% from June), the highest July total since 2022
• Year-to-date hiring plans: 107,500 (up 25% year-over-year)

Sector Impact:

Technology led job cuts with 9,867 layoffs in July and 149,023 year-to-date—67% higher than last year and representing nearly one-third of all 2026 cuts. AI continues as the primary driver for the fifth consecutive month. Other affected sectors include financial services, government, healthcare, transportation, and media.

Aerospace and defense industries led hiring plans, with strong demand also in automotive and manufacturing sectors—"work that happens on a floor rather than a screen," according to Challenger.

Market Implications:

Despite AI-driven workforce restructuring, the labor market shows resilience with hiring outpacing layoffs. The official Bureau of Labor Statistics jobs report, scheduled for Friday, is expected to show 83,000 nonfarm payroll additions with unemployment holding at 4.2%. However, ADP's Wednesday report showed private sector hiring slowed to 44,000 jobs in July, below the 75,000 forecast.