U.S. layoff announcements saw a notable 3% increase last month, reaching the highest level in 11 months, according to a report released on Thursday. Outplacement firm Challenger, Gray & Christmas revealed that job cut announcements totaled 84,638 in February, marking the highest figures since March of the previous year. While this surge is largely attributed to automation-related restructuring, the year-to-date cuts for 2024 are down by 7.6% compared to the same period last year.
The technology sector experienced some of the most significant job cuts in February, along with the transportation and services industries. Although the tech sector leads in job cuts for the year so far, there’s a 55% decrease year-to-date compared to the same period in 2023. On the other hand, the finance sector witnessed a 56% increase in cuts compared to last year.
Major reasons cited for layoffs included restructuring efforts and closures of plants, units, or stores. Notably, technological updates were mentioned in 15,225 cuts through February. Andrew Challenger, the senior vice president of the firm, suggested that companies might be categorizing cuts associated with artificial intelligence (AI) under different labels to avoid backlash. He stated, “In light of the backlash some companies have faced for directly attributing job cuts to artificial intelligence, they appear to be framing this shift as a ‘technological update’ rather than an outright substitution of human roles with AI.” Challenger emphasized that companies are increasingly implementing robotics and automation alongside AI, with AI directly cited in 4,247 job reductions last year, indicating a growing impact on workforces.
