January hiring was the lowest for the month on record as layoffs increased
A UPS driver delivers on January 30, 2024 in Miami Beach, Florida.
Joe Radle | Getty Images
Companies announced the highest level of job cuts in January since early 2023, a potential trouble spot for a tight labor market this year, according to a Thursday report from Challenger, Gray & Christmas.
The workplace company said there were 82,307 planned layoffs for the month, a 136% jump from December although it was still down 20% from the same period a year ago.
This was the second highest level of layoffs and the lowest level of hiring planned for the month of January in data going back to 2009.
Technology and finance were the hardest hit sectors, with high-flying Silicon Valley leaders such as Microsoft, Alphabet and PayPal announcing staff cuts to start the year. Amazon also said it would cut as UPS did in the biggest month for layoffs from March 2023.
“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter,” said Andrew Challenger, the company’s senior vice president. The cuts “were driven by broader economic trends and a strategic shift towards greater automation and adoption of AI in a number of sectors, but 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 were 15,806, the highest since May 2023. Food producers announced 6,656, the highest since November 2012.
“High costs and advanced automation technology are reshaping the food production industry. In addition, climate change and immigration policies are affecting labor dynamics and operational challenges in this sector,” said Challenger.
The report follows Wednesday’s news from ADP that private payrolls rose by just 107,000 for the month. On Friday, the Labor Department will release its nonfarm payrolls number, which is expected to show growth of 185,000.
224,000 to 224,000 for the week ended January 27, up 9,000 from the previous week. Continuous claims, which ran a week behind, jumped 70,000, the Labor Department said Thursday.