News & Trending Jobs & Career News

Bosses Are Firing Salaried Employees Left and Right (And Honestly, We See Why)

Employers give several reasons for the cuts, and not all of them hold up.

By Chris Lewis, CEPF , Edited by Calista Headrick

Updated Nov. 14, 2026

Add Us On Google

In 2025, U.S. employers announced 1,206,374 job cuts, the most since the pandemic year of 2020, according to outplacement firm Challenger, Gray & Christmas. This year, the cuts have concentrated in the white-collar tech world. Technology companies announced 52,050 cuts in the first quarter of 2026, up 40% from a year earlier. By September, the sector's total reached 165,925, up 54% from the same point in 2025.

The names are familiar. From Citigroup's multiyear restructuring, Block's elimination of approximately 4,000 positions, and additional reductions at Meta, Microsoft, Amazon, and Oracle, the cuts are widespread. While overall cuts are actually down from 2025, mostly because last year's wave of federal layoffs hasn't repeated, there are still plenty of companies cutting employees.

Here's what's behind the reductions and how workers should prepare themselves financially for the possibility of losing their jobs.

Resolve $10,000 or more of your debt

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.¹ <p>Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 45% before fees, or 20% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating. "Debt-Free" applies only to enrolled credit cards, personal loans, and medical bills. Not mortgages, car loans, or other debts. Results vary.</p>

AI is taking over structured, repeatable office work

In March, artificial intelligence was the leading reason employers cited for job layoffs for the first time, accounting for 15,341 announced cuts. In April, AI was the leading reason again with 21,490 cuts. That's 36,831 announced cuts directly attributed to AI in two months.

Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said in March that "Companies are shifting budgets toward AI investments at the expense of jobs." Through September, AI was cited in 120,136 announced cuts this year, about 21% of the total and the most-cited reason.

Shopping for cheaper auto insurance? Enter your zip code here to get started.

Remote jobs are moving overseas

By their very nature, remote jobs are easier to move abroad. The workplace app Blind ran a January survey of 2,392 tech and banking professionals. Among respondents, 52% expected their companies to expand hiring in India during 2026. When asked how that hiring affects U.S. jobs, 38% said it's replacing U.S.-based roles, while 23% said it's adding to them.

Tariffs and rising costs are squeezing budgets

Not every company eliminating positions is doing so because of technological advances. Tariffs were cited directly for only 7,908 cuts in 2025, according to Challenger. However, the firm says tariffs and the war with Iran are contributing to broader cost pressures. "Market and economic conditions" was the most-cited reason for cuts through April this year, at 53,058.

Inflation is adding to that pressure. Consumer prices rose 3.7% over the 12 months ending in September, up from 3.4% in August, according to the Bureau of Labor Statistics. Much of the increase came from energy, with gasoline prices up 34.2% from a year earlier.

Some companies are cutting for AI they haven't deployed yet

Many layoffs are bets on what AI might do later. The Harvard Business Review surveyed more than 1,000 executives in December 2025, and 60% said their organizations had already cut staff based on what they expect AI to do in the future. Only 2% said they'd made large layoffs tied to AI that was actually in place and working.

Some of those cuts may not last, and hiring could swing the other way. Research firms Gartner and Forrester both expect companies to undo about half of the layoffs they've blamed on AI, rehiring for work the technology couldn't handle.

Why some analysts doubt the AI explanation

Hiring managers also admit to overstating AI's role. Resume.org surveyed 1,000 U.S. hiring managers in December 2025, and 59% admitted they play up AI's role in layoffs because stakeholders react better to it than to budget problems.

Analysts have a name for this: "AI washing." Oxford Economics concluded in January that firms "don't appear to be replacing workers with AI on a significant scale." Even OpenAI CEO Sam Altman has said some companies blame AI for layoffs they would have made anyway. Challenger's own analysis of Amazon's January cuts said they appeared to stem more from over-hiring and reducing management layers than from AI.

What the cuts are costing white-collar workers

Whatever the reason for the cuts, laid-off professionals are paying for it. Two in five white-collar workers who switched jobs in the second half of 2025 accepted a pay cut of more than 10%, according to Revelio Labs, the highest rate in a decade. Only 41% got a raise of 10% or more, down from 55% four years earlier.

Finding another position is also taking longer. A NextChapter analysis of Census Bureau data found that 28.1% of unemployed white-collar workers had been searching for at least 27 weeks during January through August 2026, compared with 22.8% during the same period in 2025.

Make Money: 8 dumb ways to make money (almost anyone can do this)

What to do if your role is exposed

You can't determine whether your employer announces layoffs, but there are practical ways to reduce the financial consequences.

Build an emergency fund. Fidelity recommends saving three to six months of essential living expenses. A larger reserve may be appropriate for workers in industries experiencing frequent layoffs.
Review potential severance benefits. Companies offer different packages. Microsoft's affected workers, for example, were offered up to 39 weeks of salary, six months of health coverage, and additional assistance.
Develop skills employers value. In the Resume.org survey, 54% of hiring managers prioritized problem-solving skills, while 44% emphasized the ability to learn new tools quickly.
Apply for unemployment promptly. The U.S. Department of Labor recommends contacting your state's unemployment office right after you lose your job, since each state runs its own program with its own eligibility and benefit rules.

Bottom line

Employers have real reasons for cutting salaried roles, from AI and offshoring to tariffs and rising costs. But the evidence suggests many of these cuts are running ahead of what AI actually does today, and the professionals losing those jobs are absorbing the cost through lower pay and longer searches.

Many workers won't get much warning, either. Of the long-tenured workers displaced from 2023 to 2025, only about 45% received written advance notice that their jobs would end, according to the Bureau of Labor Statistics. Building your savings and reviewing your benefits now is the best way to cope with increasing bills if your role ends up on the list.

More from FinanceBuzz: