US job cuts fall to four-year low as AI adoption favors retraining over layoffs

September 4, 2026 at 03:00 PM2 min

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Planned job cuts in the US fell to a four-year low in the first eight months of 2026, while hiring plans hit their highest since 2023, Challenger, Gray & Christmas reported Thursday. Apollo Global chief economist Torsten Sløk said there is still no evidence AI is replacing workers. Employers are retraining staff rather than firing them, even as Block announced 4,000 layoffs in February.

Key Facts

Planned job cuts in the US fell 41% in the first eight months of 2026 compared to 2025, the lowest level in four years.
Hiring plans through the same period reached their highest level since 2023.
In the services sector, 34% of firms using AI are retraining staff, while only 4% are cutting employees.
Block announced in February 2026 it would lay off more than 4,000 employees, roughly 40% of its workforce.
In manufacturing, 22% of firms using AI are retraining staff, and none reported layoffs.

Labor Market Data

Challenger, Gray & Christmas reported Thursday that planned job cuts in the US fell to a four-year low in the first eight months of 2026. Job cut announcements in August rose from July, but the year-to-date total is down 41% compared to 2025. Hiring plans through the same period reached their highest level since 2023. Employers cited reasons other than AI as the primary driver of job cuts for the first time in six months.

AI Adoption and Retraining

Apollo Global chief economist Torsten Sløk said Thursday there is still no evidence that AI is replacing workers. Federal Reserve Bank of New York data show 22% of manufacturing firms using AI are retraining staff, while none reported layoffs. In the services sector, 34% of firms are choosing to retrain, while only 4% are cutting employees. Sløk argued that many corporate leaders are choosing to retrain their existing workforce instead of trying to replace people with still-nascent AI technology.

Block Layoffs

Jack Dorsey's Block announced in February 2026 it would lay off more than 4,000 employees, roughly 40% of its total workforce. Dorsey said the company's finances were healthy, with gross profit continuing to grow and profitability improving. He wrote that AI tools paired with smaller, flatter teams are enabling a new way of working that fundamentally changes what it means to build and run a company.