The beginning of 2026 brought a stark increase in workforce downsizing declarations among U.S. companies, with January emerging as the worst month for such announcements since 2009. According to data released by Challenger, Gray & Christmas, a firm specializing in tracking employment trends, companies based in the United States announced collective intentions to cut 108,435 jobs during the first month of the year. This figure represents a threefold jump compared to December 2025 and more than doubles the total of layoffs announced in January 2025.
This surge establishes a new high-water mark for January layoff disclosures since the depths of the Great Recession, underscoring a challenging employment environment. Notably, nearly 40% of these job cut announcements originated from just two heavyweights: Amazon revealed plans to reduce its workforce by 16,000 positions, while UPS disclosed expectations to cut 30,000 roles. Together, these two companies account for a sizable portion of the month's total job reductions.
The array of affected fields is relatively concentrated, spanning only five main sectors. Transportation and technology industries were among those impacted, alongside healthcare and health products, chemicals, and financial services, reflecting a sizeable but focused disruption across key areas of the economy.
Andy Challenger, the chief revenue officer at Challenger, Gray & Christmas, highlighted the unusual magnitude of these cuts in the first month of the year. Noting that the first quarter often experiences higher layoff volumes, he underscored that the January total stands out as particularly significant. Challenger noted, "It means most of these plans were set at the end of 2025, signaling employers are less than optimistic about the outlook for 2026." This outlook suggests a degree of caution or uncertainty influencing corporate staffing decisions as the new year unfolds.
Further context comes from labor market data from last year, indicating that the U.S. witnessed the slowest pace of job growth outside of a formal recession since 2003. This moderation in employment expansion appears to have persisted as January 2026 opened, without a marked rebound apparent early on. In tandem with the heavy job cut announcements, hiring intentions have remained subdued.
Indeed, January 2026 saw employers announce plans to add just 5,306 new positions, the lowest January tally recorded since Challenger began monitoring hiring announcements in 2009. Complementing this data, payroll processing firm ADP released figures indicating private-sector employment increased by a modest 22,000 jobs during the same month — a fairly restrained growth rate.
Examining the reasons provided for the announced workforce reductions reveals several primary factors. Contract loss was cited as the dominant cause, accounting for 30,784 cuts, followed closely by unfavorable market and economic conditions with 28,392 planned reductions. Organizational restructuring or internal realignments were linked to 20,044 job cuts, while business closures generated 12,738 cuts. These causes collectively point to operational and market challenges as driving forces behind the elevated layoff levels.
Another cause named was the growing adoption and impact of artificial intelligence technologies, mentioned in connection with 7,624 cuts during the month. Although pinpointing AI's exact influence remains challenging, it is becoming an increasingly notable factor in workforce adjustments. Tariffs were identified as contributors to 294 job cuts, a smaller but still present influence on employment decisions.
Challenger remarked on the complexity of gauging AI's role in these developments, stating, "It’s difficult to say how big an impact AI is having on layoffs specifically. We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it." This reflects a landscape where technological transformation coexists with workforce downsizing, the full repercussions of which are still unfolding.