U.S. employers announced a wave of job cuts in January, with major moves by Amazon and UPS helping make it the worst January for layoff announcements since the Great Recession, according to new data released Thursday. The figures point to a sharp reset in hiring plans as companies enter 2026 weighing costs, demand, and higher borrowing expenses.
“Last month was the worst January for job cut announcements since the Great Recession,” the data showed, citing “mass layoffs outlined by the likes of Amazon and UPS.”
The spike comes after years of uneven hiring following the pandemic recovery. It also follows a period of aggressive interest rate increases that cooled investment and deals, while automation and restructuring continued to reshape large employers. The latest downturn in announcements has revived comparisons to the 2008–2009 crisis era, though the broader job market remains more stable than it was then.
Why Companies Are Cutting Jobs Now
Executives are reining in expenses after a long stretch of wage and price pressures. Companies that hired quickly during the pandemic are adjusting to slower growth and tighter margins. Leaders also face investor pressure to improve profits after a volatile year.
Several forces are at play:
- Higher financing costs have dampened expansion plans.
- Automation and software are consolidating roles across back-office and customer support functions.
- Shifts in consumer habits are cooling some pandemic-era gains.
- Global shipping and inventory patterns have normalized, reducing staffing needs in logistics.
The combination makes early-year headcount reviews more stringent, and it often concentrates announcements in January as budgets reset.
Industry Hotspots: Tech and Logistics
Amazon’s cuts spanned select divisions, reflecting an emphasis on profitability in media, devices, and other units that grew quickly in recent years. The company has been pruning overlapping teams and refocusing on projects with clearer returns.
UPS announced a sizable reduction tied to streamlining operations after package volumes cooled from pandemic highs. The delivery giant is adapting to a more typical e-commerce cadence, improved routing technology, and customer shifts to slower, cheaper services.
Technology and logistics are not alone. Professional services, media, and parts of retail are also trimming roles tied to marketing, recruitment, and real estate as firms right-size for current demand. Health care and government-linked roles remain steadier, reflecting consistent public need and funding.
How This Compares With Past Downturns
The Great Recession brought steep and sustained job losses across sectors, driven by a financial crisis and housing collapse. The present wave is narrower, focused on cost controls and productivity rather than a broad economic breakdown.
Unlike the late 2000s, unemployment rates today remain comparatively low, and many firms still report difficulty hiring for specialized roles. Job openings, while down from peaks, have not collapsed. That gap helps soften the blow for some displaced workers who can pivot to in-demand fields.
Worker Impact and Community Response
Announcements still carry real pain for families and local economies. Severance terms, benefits continuation, and job placement support vary by employer and state. Unions and worker groups are pushing for stronger safeguards and retraining for logistics and warehouse staff, who were essential during the pandemic and now face cuts as volumes ease.
Career coaches report that job seekers with adaptable digital skills move fastest. Roles in AI-adjacent tools, data analysis, cybersecurity, and supply-chain optimization continue to draw interest even as legacy positions shrink.
What Economists Are Watching
Analysts are tracking whether cuts spread to small and midsize businesses, which can signal deeper weakness. They are also watching wage growth, consumer spending, and credit conditions for signs that companies will resume hiring later in the year.
A key question is whether firms are front-loading reductions in January or preparing for a longer belt-tightening phase. If inflation cools and borrowing costs ease, confidence could improve, opening the door to selective hiring by summer or fall.
The latest wave of announcements marks a tough start to the year but not a repeat of the last major crisis. Large employers such as Amazon and UPS are reshaping teams for efficiency after a period of rapid change. For workers, targeted upskilling and flexibility will be vital. For policymakers and markets, the next few months of inflation and spending data will show whether January’s cuts were a sharp reset or the first step in a longer slowdown.
