Layoffs jumped in January as companies pull back on hiring

Layoffs across the U.S. surged in January to their highest level for the month since 2009, when the economy was reeling from the housing crash, new data shows.

Employers announced 108,435 job cuts in the first month of the year, up 118% from the year-ago figures, according to outplacement firm Challenger, Gray and Christmas. Layoffs often rise in January as companies adjust their payrolls to meet financial targets for the forthcoming year. 

The top three reasons employers cited in cutting jobs last month were losing a commercial contract, stock market and economic conditions, and restructuring.

Most layoffs by industry

The sectors that dismissed the most employees in January, according to Challenger, Gray and Christmas:

• Transportation: 31,243 job cuts
• Technology: 22,291 job cuts
• Health Care: 17,107 job cuts 
• Chemical: 4,701 job cuts
• Media: 510 job cuts

Driving the January layoffs were large cuts by several major companies. Those included Amazon, which said it was cutting 16,000 jobs, and delivery company UPS, which plans to slash its workforce by 30,000 this year. 

The spurt in layoffs signals that businesses are “less-than-optimistic about the outlook for 2026,” Andy Challenger, chief revenue officer at Challenger, Gray and Christmas, said in a statement. 

Pinterest and chemical manufacturer Dow also announced layoffs, which they attributed in part to their adoption of artificial intelligence. Employers directly cited AI in announcing nearly 8,000 layoffs in January, 7%, Challenger’s data shows.

Some experts have questioned the extent to which AI is playing a role in layoffs, with economists telling CBS News that companies could be using AI as a pretext for job cuts.

“I don’t think these companies are doing layoffs because they know AI can replace workers, but I think they’re investing in it,” Andrew Stettner, senior director for economic security at the nonprofit National Employment Law Project, told CBS News.

Although layoffs have edged up, the nation’s unemployment rate remains low by historical standards, at 4.4%. The Federal Reserve on Jan. 28 said that the economy was expanding at a “solid pace,” while noting that inflation remains above its 2% annual target.

Yet the latest economic signals show that job openings around the country are falling, while more Americans are filing for unemployment benefits. Initial jobless claims jumped to 231,000 for the week ending Jan. 31, up sharply from the previous week, according to the labor data released on Thursday. 

Revelio Labs, a workforce intelligence company, reported a 64% increase in the number of workers who received layoff notices between December 2025 and January. 

To be sure, the spike in layoffs isn’t a sign of a broader economic malaise, Stettner emphasized. For example, the construction sector is booming as demand for AI services and the data centers required to power them increases. Still, he called the pockets of layoffs “concerning.”