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Job cuts in the US surged in January, marking the worst start to a year since 2009, according to a private survey of the domestic labour market.
US-based employers cut a combined 108,435 positions in the first month of the year, employment services company Challenger, Gray & Christmas said on Thursday, the highest January level since 2009. It was more than double the almost 50,000 job cuts in the same month in 2025 and was up 205 per cent from December.
The reductions reflect how companies are reducing their workforces after years of robust hiring following the Covid-19 pandemic and that they might not rush to refill those roles. Challenger said January represented the lowest level of hiring since it began tracking the figures in 2009, with just 5,306 hiring plans announced by US employers.
The report comes as Federal Reserve policymakers have been focused on signs that the labour market has been cooling in recent months. It also highlights concerns that advances in AI are pressuring employment in professional services industries.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signalling employers are less than optimistic about the outlook for 2026,” said Andy Challenger, chief revenue officer at Challenger.
Although not normally viewed as a top-tier data release, the Challenger survey may receive more scrutiny in markets this week given the labour department delayed the release of the January payrolls report to February 11 from February 6 originally.
More than 31,000 of the January job cuts were in the transportation sector, fuelled by UPS’s decision to eliminate 30,000 jobs after severing ties with Amazon. The technology sector had 22,291 cuts, with Amazon contributing 16,000 of these as it restructures management.
Almost 31,000 of the January cuts were due to contract loss, followed by “market and economic conditions” as the reason for 28,000 job losses. AI was cited as the reason for 7,624 reductions, while tariffs were behind 294 lay-offs.
February has also been off to a gloomy start, with the Washington Post announcing plans this week to cut up to a third of staff.
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