October 2026: Fewer Layoffs Blamed on AI, and Growth Without Much Hiring

U.S. employers announced 43,994 job cuts in October 2026 and named artificial intelligence as the reason for 1,265 of them, according to the Challenger, Gray & Christmas report released on November 5. That is the lowest monthly AI figure of the year. Market and economic conditions were cited for 16,407 of the month’s cuts and have now passed AI as the most cited reason for 2026.

In the same week, the Bureau of Labor Statistics reported that payrolls rose by 165,000 in October with unemployment at 4.1%, and that third-quarter productivity grew 3.6% at an annual rate while hours worked grew 0.1%. This piece reads the releases together and asks what they mean for a 2027 workforce plan. Our earlier review of 2026 layoff announcements covers April through October company by company, so the examples here are limited to statements made since October 26.

What did the month’s numbers show?

These figures come from different instruments, and they do not always agree. ADP, working from its own payroll client data, counted 86,000 new private jobs and a third straight monthly loss in professional and business services, down 27,000. The BLS survey showed the same sector adding 70,000. ADP also reported base pay up 3.2% over the year for private-sector workers, 3.0% for people who stayed in their jobs and 4.8% for people who changed. Two respected surveys disagreeing about white-collar services in the same month is a good reason to avoid resting a plan on one month of one series.

Why did the AI count fall?

Challenger’s summary of the month was direct: “The reasons employers give have shifted from technology to the economy.” AI was the most cited reason for cuts through the spring and summer. For January through October it has been cited for 121,401 cuts, about 20% of the total, against 130,531 for market and economic conditions.

The year-to-date total of 617,189 is down 44% from the same period of 2025, and Andy Challenger of the firm said, “This is a low-fire environment.”

One large item sits outside the count. The full report notes that Microsoft made voluntary exit offers to 60,000 employees in October, and that Challenger records such programs only by the number of people who accept or by a stated reduction target. Microsoft’s own October 26 post describes a “time-limited, voluntary program” for eligible staff in four countries. The post gives no headcount and does not mention AI.

What did companies say, and what did reporters add?

Four reductions reported in early November show how far the coverage of a cut can sit from the company’s own words. At SUSE, the enterprise Linux company, the chief executive told staff that about 10% of the global workforce would go, in a memo seen by The Register on November 2. The memo said “automation and AI are fundamentally shifting how software companies operate” and that “the requirement for some existing roles has greatly diminished.” It also pointed to the cost base and to a review of strategy and team structures. The headline presented AI as the cause, which is a stronger claim than the memo makes.

NICE, which sells customer service software, said it expects to reduce its global workforce by approximately 5% “to better serve customers deploying AI-powered customer experience solutions at enterprise scale,” according to Calcalist, published by Ynetnews in early November. The AI in that sentence is what NICE’s customers are buying. The statement makes no claim that AI is doing the work of the people who are leaving. The figure of about 500 roles in the headline is not attributed to the company.

Canva’s chief executive, Melanie Perkins, told staff that 1,271 roles, about 22% of the company, would be cut, changed or relocated, and wrote, “This has been our hardest year yet” (Forbes Australia, November 4). The Register reported that her message does not mention AI. The AI references in the Forbes Australia article came from the reporter’s account of Canva’s product strategy and from a spokesperson for Blackbird, which the article calls Canva’s biggest shareholder, who spoke of “growing AI capabilities.”

Squarespace confirmed to TechCrunch on November 2 that it is reducing its global workforce by approximately 19%, around 300 people, as part of a restructuring. The statement does not mention AI. The article goes on to describe how AI site builders have changed the website business. That is the reporter’s context, and the article does not present it as the company’s reason. Across these four cases, AI appears in the coverage of every one and in the company’s own words in two.

Is the economy growing without much hiring?

The third-quarter productivity release is the figure most relevant to a finance team. Output in the nonfarm business sector rose 3.7% at an annual rate, hours worked rose 0.1%, and productivity rose 3.6%, or 2.1% over the same quarter a year earlier (BLS, November 5). The figure is preliminary and covers one quarter, and the release does not mention AI.

Hiring data points the same way. The hires rate was 3.4% in September and the layoffs and discharges rate was 1.0% (BLS, November 3). Employers are keeping the people they have and adding few, and people looking for work carry the cost. The BLS counted 2.0 million people unemployed for 27 weeks or more in October, 27.6% of all unemployed people. Indeed Hiring Lab calculated that health care and social assistance accounted for 519,000 of the 885,000 jobs added over the past 12 months, and said employers have tilted their hiring toward experienced candidates.

Two Federal Reserve officials connected this pattern to AI on November 10, and both did so with care. Governor Christopher Waller described the labor market as “low hire, low fire” and included the arrival of AI among several sources of uncertainty that may have restrained hiring. He cited Beige Book reports that in several Fed districts “firms had delayed hiring or anticipate less job creation after investing in AI,” and said new entrants to the labor force “are having a harder time finding jobs.” Vice Chair for Supervision Michelle Bowman said about 25% of businesses and roughly 10% of workers report using AI every day in their work, and that there is a risk “some workers will be displaced as firms adopt this technology.” She added, “Monetary policy cannot address that transition directly,” and said she expects AI adoption to raise productivity “over time.”

One earnings call shows what this looks like inside a company. On ServiceNow’s October 28 call, as reported by CTech, the chief financial officer said the company’s use of its own AI products had produced more than $1 billion in annualized efficiency gains and that this allowed it to hire fewer people, while the number of quota-carrying salespeople grew. The chief executive said, “Our ultimate headcount has actually slightly declined, which is a gorgeous situation.” Headcount can fall when departures outpace hiring, and no layoff announcement records it.

Executives expect more of the same. In a PYMNTS Intelligence report dated November 5, 84% of executives at U.S. companies with at least $1 billion in revenue said they expect business growth without a proportional rise in staff over the next three years. That is a reported expectation about the future.

What should a CHRO or CFO take into the 2027 plan?

The Conference Board’s third-quarter survey of chief human resources officers, published on October 1, found that 82% had changed their workforce planning process because of AI, while 19% had built expected AI effects into workforce and financial planning across the enterprise. October’s data suggests four places to close that gap.

Start with the hiring line. With hiring and layoffs both low, any effect of AI on staffing may sit in roles left unopened or unfilled, where no announcement records it. Recording why each requisition was closed or deferred, including whether an AI tool changed the workload, gives finance a real basis for the 2027 headcount budget.

Keep the national productivity figure out of your budget assumptions. The BLS number is one preliminary quarter for the whole nonfarm business sector, and says nothing about which roles in your company produce more per hour. A plan needs that evidence at the level of tasks within a role, measured in your own operations.

Decide on purpose what happens to entry-level hiring. Waller said new entrants are finding jobs harder to get, and Indeed reports hiring tilted toward experience. Pausing junior hiring may narrow the internal pipeline for future supervisors and specialists, a cost that a one-year budget does not show.

State the reason for any reduction as precisely as the evidence allows, and use the same reason in the staff memo and in any required notice. From January 1, 2027, California’s SB 951 requires Cal-WARN notices for covered layoffs that result entirely or substantially from AI or other automated technology to carry the header “This notice is for a technology displacement” and to describe the technology and the job functions involved, according to a DLA Piper summary dated November 4. This is general information and not legal advice.

For task-level evidence on your own roles, JobRoute publishes how it scores AI exposure by task, and you can request a sample covering 10 roles.