Layoffs in January were the highest in US since 2009: Challenger

According to outplacement firm Challenger Gray & Christmas, US employers announced the highest layoffs and the lowest new hires for January since 2009, marking a stark signal of shifting sentiment in the U.S. labor market as 2026 begins.

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” said Andy Challenger, the firm’s workplace expert and chief revenue officer. “It means most of these plans were set at the end of 2025, signaling that employers are less-than-optimistic about the outlook for 2026.”

US companies reported 108,435 job cuts in January, a dramatic 118 percent increase from January 2025 and a 205 percent surge from December, Challenger said. It is the highest for the month since 2009, when the US was emerging from the deepest economic downturn since the Great Depression.

The transportation and technology sectors were hit hardest. UPS planned to slash over 30,000 jobs while Amazon announced 16,000 layoffs.

The report said the leading cause cited for job cuts was “contract loss,” accounting for 30,784 positions, followed closely by “market and economic conditions,” at 28,392 cuts.

The US labor market is hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to tamp down a spike in pandemic-induced inflation, according to the Associated Press.

Meanwhile, US companies plan to announce 5,306 new hires this month, the lowest number on record for Challenger since 2009.

“This suggests that AI is persuading a rising proportion of businesses to pause on new hiring," Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, told Reuters.

Artificial Intelligence was cited in 7,624 American job cuts, representing 7 percent of the January total. However, Challenger noted the difficulty in precisely quantifying AI’s impact, “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.”

The number of Americans applying for jobless aid for the week ending January 31 rose by 22,000 to 231,000, the US Labor Department reported Thursday. The total number of Americans filing for jobless benefits for the previous week, ending January 24, grew to 1.84 million, according to the Associated Press. A severe winter storm sweeping across much of the country likely contributed to the recent spike in claims.