Key facts
- Private employers added 122,000 jobs in May.
- U.S. job openings rose to 7.6 million in April.
- AI was cited as the reason for 40% of U.S. job cuts in May.
- This marks the highest monthly total for AI-related layoffs since 2023.
- U.S. employers announced 97,006 job cuts in May, a 16% increase from April.
- The tech sector led with 38,242 layoffs in May.
- Amazon is investing $200 billion in AI data centers.
- Amazon has laid off 30,000 corporate employees.
- Seattle City Council approved a yearlong moratorium on data center construction.
- 74% of surveyed Asia-Pacific companies are integrating AI without widespread job cuts.
- A Unitarian Universalist secured a religious exemption from using AI at work.
The U.S. labor market demonstrated unexpected resilience in May, with private employers adding 122,000 jobs, exceeding economist forecasts. Concurrently, job openings climbed to 7.6 million in April, marking a near two-year high, indicating a stabilization in the labor market. This strength may influence the Federal Reserve's upcoming policy decisions, with economist Stephanie Roth noting that inflation does not appear to be accelerating materially based on the May jobs report.
Despite the overall labor market strength, artificial intelligence is increasingly being cited as a reason for workforce reductions. A report by Challenger, Gray & Christmas indicates that AI was cited for 40% of U.S. job cuts in May, the highest monthly figure since the firm began tracking this trend in 2023. The tech sector was particularly affected, announcing 38,242 layoffs in May, a 16% increase from April and the highest monthly total since August 2024. Companies like Block, Cisco, and Atlassian have cited AI-driven efficiency improvements and restructuring for the 'agentic era' as reasons for these reductions, though some observers question the extent to which AI is truly the cause versus 'AI washing.'
This trend contrasts with findings in the Asia-Pacific region, where a survey by Aon revealed that 74% of companies are integrating AI without widespread job cuts, often creating new AI-related roles. The impact of AI on productivity remains uneven, with a study finding rapid adoption but inconsistent efficiency gains. In other technology-related news, Amazon engineers are reportedly questioning the company's substantial $200 billion investment in AI data centers while simultaneously conducting layoffs of 30,000 corporate employees. Amazon also unveiled a new warehouse robot, with an executive asserting that robots historically increase employment. Humanoid robot development continues to face setbacks, prompting Silicon Valley to seek solutions. Separately, a company successfully replaced a code review role with AI, with developers reportedly embracing the tool. A Unitarian Universalist recently obtained a religious exemption from using AI at work due to ethical objections, a development that Pope Leo XIV's recent remarks questioning AI's impact on human dignity could potentially encourage, leading to workplace challenges for employers.