WO Digest: Tech layoffs amidst record revenues; Shift

toward temp work; Powering the AI economy with skilled trade workers The WO Digest: May 26, 2026

• Challenger, Gray & Christmas reports U.S. tech firms announced 85,411 cuts in the first four months of 2026 alone, a 33% jump over last year. Layoffs are accelerating in 2026, with more than 113,000 jobs cut so far. Meta’s 8,000 layoffs could eventually reach 20% of its workforce. What makes this wave differentis that companies are openly citing AIas the reason for the cuts, even as many report record revenues with no legal requirement to prove those claims are accurate.
• The labor market is increasingly shifting toward temporary work.The Federal Reserve’s latest Beige Book says employers are boosting demand mainly for contract workers, not permanent hires. Bullhorn data shows temp placements rose 9.1% from February to March and 5.4% year over year, while government data shows temporary help employment reached its highest level since last August. Read why companies are cautious about adding full-time staff, even as demand for work remains strong.
• For many companies, the biggest hiring challenge isn’t finding college graduates. It's finding skilled blue-collar workers. Major companies including Ford Motor Company, NVIDIA and AT&T are increasingly emphasizing the need for skilled trade workers to build the infrastructure powering the AI economy. At the same time, the rapid spread of AI is creating a hiring slowdown for young college graduates seeking entry-level roles in AI-exposed industries.
• Kelly Services’ latest “Need to Know” briefing highlights a labor market filled with contradictions: recession-level anxiety despite low unemployment, strong hiring plans but weak retention, and growing concern over AI’s impact on entry-level jobs. The report also points to small businesses as the biggest driver of job growth in 2026, while employers ramp up AI spending and struggle with rising healthcare costs and contentious return-to-office mandates.
• A new survey from Cross Country Healthcare, conducted with Florida Atlantic University's College of Nursing, reveals mounting pressure on the nursing workforce. Based on responses from more than 2,000 nurses and nursing students, the report found burnout has surged from 39% to 67% since 2022, while concerns over pay, benefits and feeling undervalued have sharply increased.
• A new report warns that the biggest U.S. labor market challenge over the next 15 years will be matching people to the right roles. Researchers project the workforce could shrink by 1.2 million workers by 2040 due to retirements and slower immigration, while AI reshapes white-collar work. The result could be a growing mismatch between available workers and in-demand jobs, pushing unemployment significantly higher. The report outlines that it is labor reallocation -- and not job creation -- that will become the defining workforce issue of the AI era. Explore our full newsfeed at workforceobserver.com and share with your team! It's fact-filled, focused and free! WO Digest is a free, weekly newsletter, delivering a round up of top stories and covering important insights into the world of work.