Artificial intelligence is the leading reason companies cite for layoffs for the second straight month, accounting for more than one in four job cuts in April, according to a new report from outplacement firm Challenger, Gray & Christmas.

The report found 21,490 AI-related cuts last month, or 26% of the 88,387 total, marking the second straight month the technology has been the top driver of layoffs.

While AI is often blamed for job losses and fewer entry-level opportunities, some skeptics question whether it is the sole cause. Some companies have also seen stock gains after pivoting to AI, such as sneaker maker Allbirds, whose shares surged about 600% after announcing plans to shift away from footwear and toward AI.

AI-related layoffs came as overall job cuts rose 38% in April from March, Challenger found. The largest share — 33,361 cuts — occurred in the technology sector.

Some tech firms say they're shifting spending away from labor to direct more capital toward AI.

"Regardless of whether individual jobs are being replaced by AI, the money for those roles is," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in the statement.

Other reasons for job cuts

Other factors are driving layoffs, including President Trump's evolving tariff agenda and the Iran war, Challenger said. Throughout 2026, "market and economic conditions" was the most cited reason, accounting for 53,058 cuts, the company found.

In April, company closures were the second most common reason for job cuts, followed by cost-cutting.

Other data suggests AI is affecting some white-collar jobs. In past automation cycles, blue-collar workers were more likely to bear the brunt.

Data from the U.S. Bureau of Labor Statistics offers some evidence of AI-related job losses, according to Yardeni Research President Ed Yardeni. Layoffs in professional and business services — sectors vulnerable to AI — rose by 150,000 in March from a year earlier.

Still, Yardeni and other economists say AI could eventually create jobs by driving demand for new roles that did not exist just a few years ago.