January was the worst start to a year for job cuts in the United States since 2009, with high-profile layoffs at UPS and Amazon fueling a tumultuous beginning to 2026 on the labor market, according to a private firm’s report, as official government reports remain delayed.
The 108,435 job cuts last month represented a 118% jump from the same period last year and the most in any January since 2009, when the U.S. was reeling from the Great Recession triggered by a housing market crisis, consulting firm Challenger, Gray & Christmas said in its latest monthly report.
The decline comes after previous signs of a stabilizing labor market in December, when 35,553 layoffs marked the lowest total since July 2024.
It suggests most of the January layoffs were set in motion in 2025, “signaling employers are less-than-optimistic about the outlook for 2026,” according to Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.
Contract loss represented the biggest reason for job cuts, totaling 30,784 in January, with market and economic conditions (28,392 cuts) and restructuring (20,444) also playing major roles for layoffs, according to the report.
The surge in January layoffs comes as official government jobs data remains delayed—blamed on the recent government shutdown—limiting clarity around the true state of the labor market.
Federal Reserve Chair Jerome Powell also acknowledged in November recent labor data had been “distorted,” previously suggesting federal data overestimated new jobs by as many as 60,000 a month and warning during last year’s government shutdown that gaps in federal data made it difficult for the Fed to accurately assess labor market conditions.
UPS announced last month it would be cutting 30,000 jobs this year, after it eliminated 62,000 positions in 2025, The New York Times reported. The company’s new layoffs are triggered by the company ending its relationship with Amazon, according to the report, which noted Amazon was also a leader in layoffs. Amazon announced in late January it would lay off around 16,000 corporate employees as it continues to restructure its business model.
Crucial Quote
“People who have jobs are hugging onto them more than they normally would,” Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, told ABC News, adding that the labor market is currently a “low-hire, low-fire environment.
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The spike in January layoffs comes as the U.S. labor market shows signs of cooling after several years of strong hiring after the pandemic. While unemployment remains low by historic standards, higher interest rates, slower consumer demand and uncertainty about economic growth have pushed many companies to rein in costs. Challenger said AI was cited for 7,624 job cuts in January, as some companies are increasingly turning to artificial intelligence and automation to streamline operations, reducing the need for certain roles. Companies are also increasingly less likely to be hiring, with U.S. employers announcing plans to fill just 5,306 jobs in January—the fewest for a month since Challenger began tracking the data in 2009. The pullback in hiring makes it more difficult for laid-off workers to quickly find jobs, potentially prolonging unemployment spells even if the broader economy avoids a recession.
