January hiring was the bottom for the month on file as layoffs surged

Companies introduced the best degree of job cuts in January since early 2023, a possible hassle spot for a labor market that will probably be in sharp focus this yr, in accordance with a report Thursday from Challenger, Gray & Christmas.

The job outplacement agency mentioned deliberate layoffs totaled 82,307 for the month, a soar of 136% from December although nonetheless down 20% from the identical interval a yr in the past.

It was the second-highest layoff complete and the bottom deliberate hiring degree for the month of January in information going again to 2009.

Technology and finance have been the hardest-hit sectors, with high-flying Silicon Valley leaders resembling Microsoft, Alphabet and PayPal saying workforce cuts to start out the yr. Amazon additionally mentioned it could be slicing as did UPS within the largest month for layoffs since March 2023.

“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter,” mentioned Andrew Challenger, senior vp of the agency. The cuts have been “driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs,”

Financial sector layoffs totaled 23,238, the worst month for the sector since September 2018. Tech layoffs totaled 15,806, the best since May 2023. Food producers introduced 6,656, the best since November 2012.

“High costs and advancing automation technology are reshaping the food production industry. Additionally, climate change and immigration policies are influencing labor dynamics and operational challenges in this sector,” Challenger mentioned.

The report follows news Wednesday from ADP that non-public payrolls elevated by simply 107,000 for the month. On Friday, the Labor Department will probably be releasing its nonfarm payrolls rely, which is predicted to point out development of 185,000.

Initial jobless claims totaled 224,000 for the week ended Jan. 27, up 9,000 from the earlier week. Continuing claims, which run every week behind, jumped by 70,000, the Labor Department reported Thursday.