As Companies Spend More on AI, Many Spend Less on Staff

As organizations race to adopt artitifical intelligence (AI), some are investing in workforce development to complement the technology, while others are shifting resources to tech—and away from people. 

According to a recent study by outplacement and executive coaching firm Challenger, Gray & Christmas, AI is the leading cause of job cuts in 2026 and was cited in more than 120,000 dismissals in the first nine months of the year, representing about 21 percent of all layoffs. Those cuts have been concentrated largely in the technology sector, said Andy Challenger, the firm’s chief revenue officer.

"Because its products and investments are in building artificial intelligence itself, they're just way more affected by investments in AI," he said. "We may very well see jobs being replaced by artificial intelligence in all these other sectors as it becomes easier to use, and it can really be deployed in ways that replace people’s jobs."

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