The U.S. employment market continues to struggle with job cuts and layoffs.
By Andrea Bossi
Essence
https://www.essence.com/
U.S. companies kicked off the year with the most job cuts in any January since 2009, during the height of the Great Recession.
Companies announced more than 108,000 job cuts last year, according to data by outplacement firm Challenger, Gray & Christmas. (In 2009, nearly 242,000 job cuts were announced.) The January 2026 number also represents an 118% increase from job cuts in January 2025, signaling how significant things have changed in just one year.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” Andy Challenger, the company’s chief revenue officer, said in a press report. “It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.”
The firm’s report also showed that companies’ hiring plans sunk by 13% compared to the same time last year. They were down a whopping 49% from plans just one month before in December 2025. In other words, job cuts remain high, and hiring continues to be low. U.S. job openings, after all, have just reached their lowest level since September 2020, per recent data.
The leading reasons for January job cuts? Contract loss, general market conditions, restructuring, and store or department closings in that order, according to the Challenger report.
Transportation saw the highest number of cuts in January, followed by technology. “CEO [of Amazon] 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 over hiring and reducing layers than to the new technology,” Challenger said in the report.
Per Bloomberg, nearly half of the cuts in January came down to three companies: Amazon, the United Parcel Service (UPS), and Dow. The company — which Jeff Bezos founded and remains a significant shareholder and executive chair — said it plans to cut 16,000 corporate roles as it invests in trying to win the AI “race.” Mere weeks later, Bezos kicked off February with layoffs that gutted the newsroom at The Washington Post, which he owns.
The Challenger report came out ahead of the Bureau of Labor Statistics monthly jobs report. Its January 2026 data is expected February 9, delayed a few days by a brief government shutdown. That upcoming BLS report on January 2026 jobs will come after dire December numbers, where Black unemployment rose and a net of 81,000 workers left the workforce who were all women.
