AI Shocks White-Collar Workers! US Corporate Layoffs Surge in March, Tech Sector Hit Hardest

Artificial intelligence is accelerating the reshaping of the U.S. labor market landscape.

According to a report released on Thursday by employment placement firm Challenger, Gray & Christmas Inc., U.S. companies announced 60,620 layoffs in March, a surge of over 25% compared to February. The technology sector led with 18,720 layoffs, an increase of over 24% year-on-year.

AI was cited as the primary reason for layoffs, accounting for one-quarter of all industry layoff announcements.

The technology sector is particularly affected – AI models are making programming jobs easier and significantly reducing labor intensity. Tech giants such as Meta Platforms, Oracle, and Jack Dorsey's Block have already initiated layoffs to reallocate resources towards AI development.

Technology Sector Takes the Brunt, Layoffs Hit Two-Year High This Year

The technology sector is at the center of this AI-driven wave of layoffs.

In the first quarter of this year, total layoffs in the technology sector exceeded 52,000, a 40% year-on-year increase, marking the highest level for the same period since 2023. In March, 18,720 layoffs were announced, a 24% increase year-on-year.

Andy Challenger, Chief Revenue Officer at Challenger, stated in a release:

"Companies are shifting budgets to artificial intelligence investments at the expense of jobs. In tech companies, AI can replace coding jobs, thereby truly replacing some positions. Other industries are also testing the limits of this new technology; while it cannot completely replace jobs, it does cause unemployment."

More layoffs are expected in tech companies in 2026. Reports indicate that Dell, Oracle, and Meta have recently been conducting layoffs.

AI Becomes Primary Reason for Layoffs, White-Collar Job Pressure Rises

The report reveals a signal of structural shift: AI has surpassed business closures, restructuring, and market and economic conditions to become the number one reason for layoff announcements this month, accounting for a quarter of all industry layoff announcements.

Challenger pointed out that the impact of AI on employment is most direct in technology roles, especially those involving code writing. For other industries, AI is currently not yet capable of completely replacing jobs, but it has continuously caused marginal job losses.

This trend confirms market concerns that AI will trigger massive upheaval in the white-collar labor market – knowledge-intensive workers are facing increasing structural pressure.

Overall Employment Market Remains Resilient, but Signs of Weak Demand Emerge

Despite the rising number of layoff announcements, the overall labor market remains relatively stable for now.

The report shows that the number of layoff announcements in March decreased by 78% compared to the same month last year, and corporate hiring intentions nearly tripled compared to the previous month. However, the total volume of hiring plans for this year remains lower than in the same period of 2025, consistent with an overall softer trend in labor demand.

Meanwhile, according to data released on Wednesday by ADP Research, U.S. companies added 62,000 private sector jobs in March, similar to the increase last month, continuing a trend of moderate expansion.

Analysts describe the current labor market state as "low hiring, low firing," meaning that while there hasn't been a widespread wave of unemployment, a substantial contraction in the willingness to hire has been quietly accumulating. The trend of accelerating AI investment and parallel streamlining of positions may exert sustained underlying pressure on the job market.