WO Digest: Layoffs; Small-business hiring lags; Data center hiring booms, but many roles won't last

The WO Digest: June 2, 2026

• U.S. employers announced 97,006 job cuts in May, up 16% from April and the highest May total since 2020, according to Challenger, Gray & Christmas. Layoffs have risen for three straight months, with AI cited as a leading driver for the third consecutive month. Despite the increase, year-to-date job cuts remain well below 2025 levels, which were inflated by federal workforce reductions.
• Large companies are hiring aggressively, but smaller businesses are struggling to keep pace. The hiring surge was driven largely by the nation’s biggest employers. Openings at companies with 5,000+ employees were 81% above pre-pandemic levels, while hiring demand among smaller employers—the backbone of the labor market—has remained mostly flat since mid-2024.
• KPMG describes today's labor market as being stuck in "purgatory." Employers are posting more jobs, but hiring remains slow as workers stay put. The result is a low-turnover labor market where openings are rising, yet many job seekers still struggle to land roles. KPMG expects modest job growth, 4.3% unemployment, and persistent underemployment despite overall labor market resilience.
• The net number of jobs AI is eliminating each month is shrinking. That sounds like good news. It isn’t—at least not for Gen Z and other entry-level white-collar workers, who remain the most exposed. Goldman Sachs estimates AI is now eliminating about 11,000 net U.S. jobs per month, down from 16,000 two months ago. The improvement stems largely from a surge in data center construction jobs, not slower AI adoption. Experts warn many of those construction roles are temporary, while the permanent workforce needed to operate data centers is far smaller.
• Anthropic CEO Dario Amodei warns that AI could reshape the labor market so dramatically that governments may be forced to adopt new worker-support policies regardless of political ideology. Amodei argues that if AI-driven job displacement unfolds at the scale he expects, economic reality—not politics—will drive the policy response. Whether that level of disruption materializes remains one of the biggest unanswered questions in AI.
• A new Workforce Observer blog post explores why the most valuable staffing firms are moving beyond transactional recruiting to become strategic talent advisors, helping clients with succession planning, workforce strategy, and leadership pipelines long before a role opens. The firms that succeed will be those that help clients build future leadership teams, not just fill today's vacancies. 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.