US tech firms cut nearly 140,000 jobs in six months

US technology employers announced 139,156 job cuts in the first half of 2026, up 83% from 76,214 a year ago, as companies restructured operations around artificial intelligence and shifted spending toward computing infrastructure and specialized technical roles.

Technology accounted for 31% of the 443,604 cuts announced by US-based employers through June, according to Challenger, Gray & Christmas. The overall total was down 40% from a year earlier, when government reductions drove the figure sharply higher.

Technology also led all industries in June, with 15,503 announced cuts.

“Tech remains the epicenter of this year’s cuts,” Andy Challenger, chief revenue officer at the outplacement firm, said. “AI is the dominant force as companies are restructuring around it, automating roles, and reallocating budgets toward new capabilities.”

The figures cover reductions announced by employers, including some planned departures, early-retirement offers and other programmes. They are not a count of workers who have already lost their jobs.

Across industries, employers cited AI in announcements covering 101,743 cuts during the first half, about 23% of the total. AI accounted for 14,029 announced cuts in June and was the leading reason given by employers for a fourth consecutive month.

The tally reflects the reasons companies gave when announcing reductions. It does not establish that AI alone caused each job loss, since companies may be cutting staff for several reasons at once.

The reductions have coincided with a steep increase in spending on the data centres, processors and networking equipment needed to develop and run AI systems.

Microsoft said it expected capital expenditure of about $190 billion in calendar 2026, including roughly $25 billion attributed to higher component prices.

The company spent $31.9 billion in its fiscal third quarter, with about two-thirds directed towards shorter-lived assets, mainly graphics and central processing units. The remainder went largely towards assets such as data-centre sites that Microsoft expects to use for at least 15 years.

Microsoft said its total headcount declined from a year earlier as it sought teams that could operate with greater speed. Its operating expenses rose 9%, partly because of investments in AI computing capacity, data and specialist talent.

Alphabet has raised its 2026 capital-spending forecast to between $195 billion and $205 billion, from an earlier range of $180 billion to $190 billion. Chief Financial Officer Anat Ashkenazi said the increase reflected faster delivery of capacity to meet demand.

Alphabet spent $44.9 billion on capital expenditure during the second quarter, with most of it going towards technical infrastructure supporting AI. About 60% of that infrastructure investment went into servers and 40% into data centres and networking equipment.

The spending pushed Alphabet’s quarterly free cash flow to a negative $5.9 billion, even as Google Cloud revenue rose 82% to $24.8 billion. Alphabet said it expected free cash flow to remain under pressure as infrastructure investment continued.

The figures do not point to a simple replacement of technology workers by software. Microsoft and Alphabet are reducing or reshaping some teams while continuing to spend on AI engineers, researchers, computing capacity and data-centre construction.

Alphabet, for example, said it expected to keep hiring in AI and cloud. Microsoft said higher operating expenses partly reflected spending on AI talent. The change is therefore as much about where money and jobs are moving as it is about the total number of positions being removed.

Challenger separately recorded plans by US employers to hire 91,405 workers during the first half, up 10% from 82,932 a year earlier. The figure covers publicly announced hiring plans rather than total recruitment across the economy.