A sobering new report reveals that U.S. companies announced more than 153,000 job cuts in October, the highest total for that month in more than two decades.
Layoffs in October nearly tripled from a year ago, according to data from outplacement firm Challenger, Gray & Christmas. Year-to-date job cuts have now topped 1 million while hiring plans have fallen to their lowest point since 2011.
The report explicitly cites AI adoption as a key factor driving the cuts, alongside rising costs and softening consumer spending. This is more than a story about a slowing economy.
I discuss this report and its implications with Paul Roetzer, SmarterX and Marketing AI Institute founder and CEO, on Episode 179 of The Artificial Intelligence Show.
The trend of AI-related cuts is, unfortunately, a recurring topic. For leaders who have been tracking the space, the data confirms a tough reality.
"I really want to be optimistic here, but I've been pretty consistently saying I think there's going to be some short-term pain," says Roetzer.
That pain may just be beginning. Roetzer indicates there are more cuts coming that haven't been made public yet.
"There are some indicators that we're just sort of at the leading edge of this and it's, in a way, imminent that in the next three to six months, we're probably going to see some pretty significant cuts," he said.
Several major companies have already announced sweeping reductions, citing automation and restructuring.
UPS eliminated 34,000 operational roles, pointing to increased automation and productivity. Amazon, Target, and Paramount have also announced significant cuts. The Challenger report noted that AI was the second-most cited factor for cuts in October, responsible for over 31,000 layoffs.
While some companies, including J.P. Morgan, have stated they will redeploy workers affected by AI, the data suggests finding new roles is getting harder for many.
In the near future, companies may become "a little bit more transparent about their connection to AI," Roetzer says.
The data makes it clear that ignoring the impact of AI on the workforce is no longer an option.
"We have to be realistic about this,” Roetzer said. “Ignoring it is not going to do anything," he says. "I think we're probably past the point where we can just deny that AI's going to have any impact on jobs in the economy."
The focus must now shift from denial to action and move quickly.
"We have to just be more proactive about this," Roetzer said.
While the long-term promise of AI includes innovation and job creation, the immediate data points in the other direction.
"I am anxiously awaiting the day when we can switch gears and start talking about the growth and innovation and jobs that are being created," says Roetzer.
He acknowledges that new roles are being created by AI, but they are "nowhere near at the level at which they're going to disappear."
The October jobs report serves as a clear signal: the era of AI-driven workforce disruption is no longer theoretical. It's happening.