January Job Cuts Hit Record Highs Since 2009
Recent data revealed that January 2026 witnessed unprecedented job cuts, marking the highest number recorded since 2009. U.S. employers announced a staggering total of 108,435 job losses, which is a threefold increase from December’s figures and more than double compared to January 2025.
Key Contributors to Job Cuts
Two major companies, Amazon and UPS, significantly influenced this surge. Together, they account for approximately 40% of the January layoffs, with Amazon planning 16,000 cuts and UPS announcing 30,000 job losses. The latter’s decision is largely due to its decreasing partnership with Amazon, according to remarks made by UPS executives during an earnings call.
Sector Analysis
The Challenger, Gray & Christmas report highlighted that these layoff announcements predominantly affected five industries:
- Transportation
- Technology
- Healthcare and Health Products
- Chemicals
- Financial Services
Reasons for Layoffs
The main reasons cited for the cutbacks were:
- Contract losses: 30,784 (primarily from UPS)
- Market and economic conditions: 28,392
- Restructuring: 20,044
- Closures: 12,738
- Artificial Intelligence impacts: 7,624
- Tariffs: 294
Andy Challenger, Chief Revenue Officer at Challenger, indicated that these decisions were likely firmed up at the end of 2025, suggesting a less than optimistic outlook for the current year.
Low Job Gains and Unemployment Claims
The job market also showed weak recovery signs, with private sector employers adding only 22,000 jobs in January, the lowest January total since the COVID-19 pandemic affected employment in 2021. The healthcare sector was the primary driver of this sparse growth.
In a separate report, first-time claims for unemployment benefits increased significantly. The Labor Department reported around 231,000 initial claims during the last week of January, reflecting an increase of 22,000 from the previous week and marking an eight-week high.
Economists have cautioned that fewer layoffs in January could be attributed to weak holiday hiring rather than a robust recovery in the labor market. Expert Samuel Tombs from Pantheon Macroeconomics emphasized that despite the uptick in claims, it does not necessarily indicate an improving job market.
This situation continues to develop, and further updates will follow as new data becomes available.
