U.S.-based employers announced 60,620 job cuts in March, a 25% increase from the 48,307 job cuts reported in February.
But that total was a sharp 78 percent drop from the 275,240 job cuts announced last March, according to a report released Thursday by Challenger, Gray & Christmas, a global outplacement and executive coaching firm.
Employers announced 217,362 layoffs in the first quarter, the lowest first-quarter total since 2022, when just 55,696 layoffs were recorded. This figure is 16 percent lower than the 259,948 reductions announced in the fourth quarter of 2025 and 56 percent lower than the 497,052 reductions announced in the first quarter of 2025.
Andy Challenger, a workplace expert and chief revenue officer at Challenger, Gray & Christmas, said that aside from a wave of federal job cuts announced last February and March, job reduction announcements in 2026 have largely followed the pattern of 2025. “Last year it was government, retail and technology. This year it was technology, transportation and health care,” Challenger said.
More tech layoffs may be on the horizon
Tech companies announced 18,720 job cuts in March, bringing the total number of layoffs in the sector to 52,050 by 2026. This is a 40% increase from the 37,097 job cuts announced in the same period last year and is the sector’s highest year-to-date total since 2023, when it recorded 102,391 job cuts.
More layoffs are likely. The surge in March was largely due to Dell’s layoffs, according to its latest annual report. Oracle has also reportedly begun reducing its workforce, but did not disclose the total amount. Meanwhile, Meta is cutting staff at its Reality Lab division in order to shift resources to artificial intelligence.
“Companies are shifting budgets toward AI investments at the expense of jobs. We’re seeing real role displacement in technology companies, where AI can replace coding functions. Other industries are also testing the limits of this new technology, making sacrifices in jobs, if not full job replacements,” Challenger said.
Economic pressures impact multiple sectors
The transportation industry announced the second-highest number of layoffs this year, at 32,241, an increase of 703% from the 4,017 layoffs reported for the same period in 2025, and the sector’s highest first-quarter total ever.
Airlines, shipping lines and other shipping companies are expected to face increased pressure from the continuing conflict in Iran, which could put further strain on the industry.
Healthcare companies, including hospitals, and health product manufacturers have announced 23,520 layoffs so far this year, also the largest first-quarter total ever. The previous peak was in 2023, when 22,950 cuts were recorded.
The education sector also cut 11,467 jobs in the first quarter, an increase of 170% from the 4,242 job cuts announced in the same period last year.
Meanwhile, financial institutions have announced 9,397 job cuts since the beginning of the year, a 41% decrease from the 15,982 job cuts announced in the first quarter of 2025.
“While financial institutions are being influenced by AI, these companies are also grappling with traditional cost reduction efforts, especially during times of market uncertainty and volatility,” Challenger said.
AI’s role in downsizing is growing
Artificial intelligence was the main driver of layoffs in March, with 15,341 announced layoffs, about 25% of the monthly total. Closures were followed by 13,931 job cuts, restructuring accounted for 8,726 jobs, and market and economic conditions led to 6,597 layoffs.
Market and economic conditions have been the biggest driver of job cuts so far in 2026, with 45,103 job cuts announced since the beginning of the year. Restructurings followed with 37,916, followed closely by closings with 37,405 and contract losses with 31,817. AI ranks fifth, with 27,645 announced layoffs, about 13% of this year’s total planned layoffs.
The role of AI in workforce reduction is steadily increasing. The number of layoffs in February was 4,680, equivalent to about 10% of the total for the month. Year-to-date, there have been 12,304 AI-related layoffs, accounting for approximately 8% of all planned layoffs.
Looking at long-term trends, companies cited AI in 54,836 planned layoffs in 2025, representing about 5% of all layoffs. Since tracking began in 2023, AI has been implicated in 99,470 job cuts, now accounting for 3.5% of all layoffs over the same period, up from 3% just a month ago.
U.S. employment plans surge in March, but not at 2025 pace
Hiring plans for March surged to 32,826, up 157% from February’s 12,755. This figure is also a 149% increase compared to the employment plan of 13,198 people announced in March 2025.
Despite the monthly surge, year-to-date employment projections remain slightly lower. Employers have announced plans to hire 50,887 people by 2026, a 6% decrease from the 53,867 jobs reported in the same period last year.
Seasonal demand contributed significantly to the increase in March, with just over 21% of announced employment plans related to summer jobs.
By industry, automotive leads all sectors in this year’s hiring plan with 12,258 jobs, followed by entertainment and leisure with 8,261.
Why layoffs are important for the housing market
The housing market is closely linked to the labor market, and layoffs are an important signal of how things will turn out.
Increased layoffs reduce the number of qualified buyers, lowering consumer confidence and often slowing home sales before prices adjust. Prolonged job losses could also lead to a further increase in distressed inventory, putting downward pressure on home prices in affected areas. A softening labor market could impact mortgage rates, slow new construction, and shape both demand and future supply.
Marty Zankic, owner of Chamberlin Real Estate School, said he is keeping a close eye on the job market.
“Of course we’re keeping an eye on interest rates,” Zankic told Inman. “However, projected job growth is also an important metric to follow. Rising employment numbers or wages in certain sectors can cause market disruption.”
Zankic said that while low- and moderate-income homeowners and potential buyers are most affected by both unemployment and high interest rates, some first-time purchase programs for low-income buyers could help.
“Most high-net-worth individuals who own homes they want to sell, or who are looking to buy in the $1 million and above price range, are essentially unaffected because the vast majority of these transactions are all cash and are not affected by interest rates,” Zankic said.
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