US Job Cuts Surge 28% in January, Led by Tech and Retail

US employers announced 49,795 job cuts in January, marking a 28% increase from December’s total of 38,792

However, Data from Challenger, Gray & Christmas, Inc. shows the figure is 40% lower than the 82,307 cuts recorded in January 2024, making it the lowest January total since 2022.

While layoffs started the year on a quieter note, analysts warn early February has already seen major announcements, suggesting the trend may not last.

Industries Facing the Most Layoffs

Technology: The Biggest Job Cutter

• Tech firms led layoffs in January, removing 7,488 jobs, a 128% increase from December.
• The industry has seen 406,679 job losses since 2022.
• AI-driven restructuring and efficiency measures are driving layoffs.

Retail: Post-Holiday Workforce Reductions

• Retailers cut 6,419 jobs in January, up 96% from December.
• Year-over-year, layoffs rose 20% from 5,364 in January 2024.
• Declining in-store shopping and automation continue to reshape the industry.

Services Sector Sees Layoff Surge

• The Services industry cut 4,930 jobs, a 106% increase from December.
• This figure is nearly identical to the 4,817 layoffs reported in January 2024.

Automotive: Industry Shifts Drive Layoffs

• The automotive sector axed 4,549 jobs, up 123% year-over-year.
• Layoffs rose 90% compared to December.
• Disruptions from electric vehicle (EV) adoption, shifting consumer preferences, and trade uncertainties are impacting jobs.

Media & News: Declining but Still Present

• The media sector cut 624 jobs in January, up 27% from December.
• However, layoffs are down 41% from the 836 reported in January 2024.
• News-related job losses dropped 64% year-over-year to 192, the lowest January total since 2019.

Where Are Layoffs Happening?

• West: Led with 19,899 layoffs, down 19% year-over-year.
  • California: 11,862 job cuts.
  • Texas: 2,966 job cuts.
  • Washington: 2,667 job cuts.
• Midwest: 13,908 layoffs, down 8.6% year-over-year.
  • Nebraska: 4,150 layoffs (up from just 13 in 2024).
  • Michigan: 2,923 job cuts.
  • Ohio: 2,951 job cuts.
• East: 6,889 redundancies, marking an 81% decrease from January 2024.
  • New York: 1,258 layoffs (down from 26,284 the previous year).
  • Massachusetts: 2,279 job cuts.
  • Pennsylvania: 2,104 job cuts.
• South: The only region where layoffs increased, rising to 9,099 (up 59% from last year).
  • Tennessee: 3,453 layoffs (up from 588 in 2024).
  • Florida: 1,732 job cuts.
  • North Carolina: 1,500 job cuts.

Why Are Companies Downsizing?

• Closures: 16,123 layoffs.
• Restructuring: 12,618 layoffs.
• Market & Economic Conditions: 8,159 layoffs.
• Unspecified Reasons: 6,810 layoffs.
• Cost-Cutting: 2,425 layoffs.
• Declining Demand: 1,328 layoffs.
• Contract Losses: 1,087 layoffs.
• Bankruptcies & Mergers: 239 layoffs from bankruptcies, 190 due to acquisitions.
• External Factors: 152 layoffs linked to natural disasters, 140 due to government regulations.

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Hiring Plans Fall Despite Layoffs

While layoffs surged, hiring announcements dropped. Employers planned to hire 6,089 workers in January, down 24% from December’s 7,999. However, this figure was 13% higher than January 2024’s record low of 5,376.

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What’s Next?

The increase in January layoffs, particularly in tech, retail, and automotive, suggests that economic uncertainty and industry shifts continue to shape the labor market.

With February already seeing significant announcements, the trend may accelerate in the coming months.