Jobs bloodbath as layoffs surge to highest level since GREAT RECESSION

Job cuts in the US have surged to their highest level since the Great Recession of 2009, according to a new report.

US-based employers announced 108,435 job cuts in January, global outplacement and executive coaching firm Challenger, Gray & Christmas revealed. 

That figure represents a 118 percent increase from the 49,795 cuts announced in the same month last year and a 205 percent jump from the 35,553 cuts recorded in December.

Analysts noted that January’s total is the highest for the month since 2009, when employers announced 241,749 job cuts.

‘Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,’ said Andy Challenger, workplace expert and chief revenue officer at Challenger, Gray & Christmas. 

‘It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.’

At the same time, applications for jobless aid surged. 

Initial claims for the week ending January 31 rose by 22,000 to 231,000 from the previous week, the Labor Department reported.

A number of high-profile companies have announced layoffs over the past year, including UPS, Amazon, and Dow, which announced cuts just last week.

The transportation sector recorded the highest number of job cuts in January, with 31,243 announced, largely driven by UPS. The company said it would eliminate 30,000 jobs after severing ties with Amazon.

The technology sector followed with 22,291 job cuts in January. The majority came from Amazon, which announced 16,000 layoffs as part of a restructuring aimed at reducing layers of management.

‘CEO Andy Jassy, like many CEOs recently, has said AI will cost jobs in the coming years, but this cut appears to be due more to overhiring and reducing layers than to new technology,’ Challenger said.

Healthcare companies and health products manufacturers, including hospitals, announced 17,107 job cuts in January – the most for the industry since April 2020, when 19,453 cuts were recorded.

‘Healthcare providers and hospital systems are grappling with inflation and high labor costs,’ Challenger explained. 

‘Lower reimbursements from Medicaid and Medicare are also hitting hospital systems. These pressures are leading to job cuts, as well as other cost-cutting measures, such as reductions in pay and benefits.’

Chemical manufacturers announced 4,701 job cuts in January, primarily stemming from a single announcement by Dow Inc., which cited a shift toward implementing artificial intelligence and automation. 

The transportation sector recorded the highest number of job cuts in January, with 31,243 announced, largely driven by UPS

This marked the sector’s highest monthly total since February 2016, when 6,640 job cuts were announced following the merger of Dow Chemical and DuPont.

The media industry announced 510 job cuts in January, down 18 percent from the 624 cuts announced in January 2024. 

News organizations – tracked by Challenger as a subset of media and including broadcast, digital, and print outlets – announced 65 job cuts, a 66 percent decline from the 192 cuts recorded in January 2025. It was the lowest January total since 2022, when no news-sector cuts were reported.

Contract losses were the leading cause of job cuts in January, accounting for 30,784 layoffs. 

Market and economic conditions followed with 28,392 cuts, while restructuring was cited in 20,044 layoffs. Store, unit, or department closures accounted for 12,738 planned job losses.

Artificial intelligence was cited as a reason for 7,624 job cuts in January, representing 7 percent of the month’s total. 

Companies referenced AI in 54,836 announced layoff plans in 2025. Since 2023, when the category was first tracked, AI has been cited in 79,449 job-cut announcements, or 3 percent of all layoff plans during that period.

‘It’s difficult to say how big an impact AI is having on layoffs specifically,’ Challenger said. ‘We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it.’

Andy Challenger of Challenger, Gray & Christmas outplacement firm

Tariffs were cited for 294 job cuts in January, after accounting for 7,908 layoffs in 2025.

Mounting layoff announcements over the past year, combined with sluggish government labor market reports, have left Americans increasingly pessimistic about the economy.

Last month, the government reported that hiring remained subdued in December, capping a year of weak employment gains that frustrated job seekers, even as layoffs and unemployment remained historically low. Employers added just 50,000 jobs in December, nearly unchanged from a downwardly revised 56,000 in November, according to the Labor Department.

The unemployment rate slipped to 4.4 percent, its first decline since June. January’s jobs report, originally scheduled for release Friday, was delayed due to a partial government shutdown earlier in the week.

The US economy added just 584,000 jobs in 2025, an average of roughly 50,000 per month. That is sharply lower than the more than 2 million jobs added in 2024, which averaged nearly 170,000 per month. 

The 2025 figures represent the smallest annual job gains since the COVID-19 pandemic devastated the labor market in 2020. Outside of recessions, it marks the weakest annual increase since 2003.

The Labor Department also reported Thursday that US job openings fell in December to their lowest level in more than five years, another sign of a cooling labor market. Vacancies declined to 6.5 million from 6.9 million in November, the fewest since September 2020, while layoffs edged slightly higher.

The data point to a labor market where hiring has clearly slowed, weighed down by uncertainty surrounding President Donald Trump’s tariffs and the lingering effects of the high interest rates the Federal Reserve implemented in 2022 and 2023 to curb pandemic-driven inflation.

Amazon boss Andy Jassy has warned the company will keep cutting corporate staff as it leans more heavily on AI and automation

In an effort to support a softening labor market, the Federal Reserve cut its benchmark interest rate by a quarter point three times late last year. 

However, last week the central bank left rates unchanged amid signs of a stabilizing labor market and a broadly improving economic outlook.

Thursday’s report also showed that the four-week moving average of jobless claims – which smooths weekly volatility – rose by 6,000 to 212,250. 

The total number of Americans continuing to receive jobless benefits for the week ending January 24 increased by 25,000 to 1.84 million.