Over 100K job cuts announced in January: analysis
U.S. companies announced roughly 103,000 job cuts in January, the highest monthly total since September 2020, a Thursday analysis found.
Last month was the worst January for job cuts since the Great Recession in 2009, according to a report from employment firm Challenger, Gray & Christmas.
Around 40 percent of last month’s job reductions came in the tech industry, where Google parent company Alphabet, Amazon, Microsoft and Salesforce announced plans to lay off thousands of workers. Many of the companies said they grew too quickly in recent years and must cut costs to boost profitability.
“We’re now on the other side of the hiring frenzy of the pandemic years,” Andrew Challenger, a senior vice president at Challenger, Gray & Christmas, said in a statement. “Companies are preparing for an economic slowdown, cutting workers and slowing hiring.”
Retailers announced 13,000 job cuts, the second most of any industry, amid slowing demand for non-essential goods, according to the report. The real estate industry cut 2,200 jobs, while construction companies cut roughly 1,100 jobs.
The firings come as companies gear up for an expected economic slowdown driven by the Federal Reserve’s interest rate hikes. Consumer spending moderated in recent months after years of growth.
While those are eye-popping layoff figures, the broader job market remains strong.
New weekly jobless claims dropped to their lowest level in nine months last week, according to Labor Department data released Thursday. They totaled 183,000, the lowest figure since April 2022.
Job openings, too, remain near record levels. The number of open jobs jumped to 11 million in December, an increase of 5.5 percent from the previous month.
The jobless rate has also remained near 50-year lows since 2021, hitting 3.5 percent in December, according to the Labor Department. Economists expect the January jobs report, which will be released Friday, to show a gain of roughly 215,000 jobs last month, according to consensus estimates.
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