Layoffs in the US increase by 3% in February, reaching the highest level in 11 months

AP

Announcements of layoffs in the United States increased by 3% last month, reaching the highest level in 11 months, as restructuring related to automation continues to take its toll, according to a report published on Thursday.

Job cut announcements reached 84,638 in February —the highest level since last March—, compared to 82,307 in January, according to the outplacement firm Challenger, Gray & Christmas. It was the highest total for the month of February since 2009, although so far this year cuts have dropped by 7.6% compared to the same period last year.

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The technology sector recorded the most job cuts in February, along with transportation and services.

Although the technology sector leads all industries in job cuts so far this year, reductions are still 55% lower so far this year compared to the same period in 2023. In the financial sector, layoffs have increased by 56% compared to last year.

According to Challenger, the most common causes of layoffs are restructurings and closures of plants, units or stores. Technological updates were cited in 15,225 layoffs in February.

Andrew Challenger, senior vice president of the firm, said that companies may be hiding cuts associated with artificial intelligence under other labels.

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"In light of the backlash that some companies have faced for directly attributing job cuts to artificial intelligence, it seems they are framing this change as a 'technological update' rather than a direct replacement of human functions by AI," said Challenger.

"In reality, companies are also implementing robotics and automation, in addition to AI. It is worth noting that just last year, AI was directly cited in 4,247 job reductions, suggesting a growing impact on the workforce of companies."