Layoffs in the U.S. hit a peak in January, marking the highest level since 2009, according to a recent report.
Challenger, Gray & Christmas, a firm specializing in outplacement and executive coaching, reported that 108,435 job cuts were announced in January. This figure is a significant jump from the 49,795 job reductions recorded in January of the previous year. Additionally, it represents a staggering 205% increase compared to December, where 35,553 layoffs were reported.
January’s layoffs were the largest in a single month since 2009, when 241,749 cuts took place. The tally was also the highest since October 2025, which saw 153,074 people laid off.
“Generally, the first quarter sees a lot of layoffs, but this January’s total is particularly striking. It suggests that many of these layoffs were planned back in 2025, reflecting a somewhat pessimistic outlook for 2026,” remarked Andy Challenger, a workplace expert and chief revenue officer at Challenger, Gray & Christmas.
The transportation sector faced the most layoffs, totaling 31,243 cuts, primarily attributed to logistics giant UPS, which announced it would lay off 30,000 workers due to reduced operations for Amazon.
In the tech sector, 22,291 layoffs were reported, with Amazon leading the charge as it cut 16,000 positions during a restructuring phase.
Regarding Amazon’s situation, Challenger noted that, while CEO Andy Jassy mentioned that AI might lead to job losses in the future, the current cuts appear to stem mainly from overhiring rather than technology advancements.
Healthcare and health product firms announced 17,107 job cuts in January, the highest since April 2020. “Healthcare providers are grappling with inflation and rising labor costs, coupled with reductions in Medicaid and Medicare reimbursements. These issues are prompting layoffs and other cuts, like reductions in pay and benefits,” Challenger stated.
Chemical manufacturing also saw 4,701 layoffs, largely influenced by shifts towards AI and automation amid announcements from the Dow Jones Industrial Average.
The primary reasons cited for layoffs included contractual losses, which accounted for 30,784 cuts, while market and economic conditions contributed to 28,392 layoffs.
Other factors leading to job reductions included restructuring (20,044 layoffs), business closures (12,738 cuts), and AI-related job losses (7,624 cuts).
Challenger expressed that predicting the influence of AI on workforce attrition is complex. “Leaders are discussing AI, companies are eager to bring it into their operations, and the market seems to favor those talking about it,” he noted.
Furthermore, the report revealed that employers announced 5,306 hiring plans in January, the lowest number for that month since Challenger began keeping track in 2009. This figure is down from 6,089 announced a year earlier and 10,496 from December.
