January Sees Record Job Cut Announcements, Worst Since 2009
January 2026 marked a significant rise in job cut announcements, reaching levels not seen since 2009. Data from Challenger, Gray & Christmas indicates that US employers announced a staggering 108,435 layoffs. This figure represents a threefold increase compared to December and more than double the total from January 2025. Major companies like Amazon and UPS were primarily responsible for these announcements.
Record Job Cuts in January
In January, approximately 40% of layoffs were attributed to two major firms. Amazon announced plans to cut 16,000 positions, while UPS disclosed intentions to reduce its workforce by 30,000. UPS’s cuts are notably linked to the end of its delivery partnership with Amazon.
Industries Affected
The job cuts in January spanned five key industries:
- Transportation
- Technology
- Health Care and Health Products
- Chemicals
- Financial Services
According to Andy Challenger, the Chief Revenue Officer at Challenger, firms typically announce high job cut numbers in the first quarter. However, the January figures indicate escalating concerns among employers regarding future economic conditions. Many layoffs appear to stem from plans established at the end of 2025.
Reasons for Layoffs
The primary reasons for the job cuts were as follows:
- Contract Losses: 30,784 positions, mainly due to UPS
- Market and Economic Conditions: 28,392 positions
- Restructuring: 20,044 positions
- Closures: 12,738 positions
- Impact of Artificial Intelligence: 7,624 positions
- Tariffs: 294 positions
While AI’s influence on job cuts remains ambiguous, it’s a topic of interest among corporate leaders. Many firms are eager to integrate AI into their operations.
Job Growth and Market Outlook
Recent labor market data reveal that 2025 saw the weakest job growth outside of a recession since 2003. In January 2026, private sector firms added only 22,000 jobs, marking the weakest monthly gain in three months. Most of these job gains originated in the healthcare sector.
Hiring Plans
Challenger’s report also noted that hiring plans for January were exceptionally low, with only 5,306 positions announced, the lowest since 2009. This trend highlights ongoing difficulties in the labor market.
Unemployment Claims Increase
On a concerning note, first-time claims for unemployment benefits surged. The week ending January 31 saw approximately 231,000 initial jobless claims, an increase of 22,000 from the previous week. This uptick indicates an eight-week high in claims, despite previous trends showing stable levels.
Economists advise that the mild rise in claims is not indicative of improvements in the labor market but may reflect weaker holiday hiring leading to fewer layoffs in January.
This situation is evolving and will continue to be monitored closely.
