52,000 people! Major US companies announce mass layoffs this week, aiming to cut costs with AI.

Several large U.S. companies announced massive layoff plans this week, collectively cutting over 52,000 jobs.

Goldman Sachs Chief U.S. Economist David Mericle said that companies are increasingly discussing layoffs and appear to hope to use artificial intelligence to reduce labor costs.

This round of layoffs, although concentrated in a few large companies, has already raised concerns among some Federal Reserve policymakers and private economists. The once-booming job market is weakening.

Data shows that the U.S. added only 50,000 jobs in December, and the median duration of unemployment rose to 11.4 weeks, the longest since 2021.

Companies Point Clearly to Cost Reduction and Efficiency

Amazon, UPS, Dow Chemical, Nike, Home Depot and other companies have all disclosed layoff plans. Most companies said the job cuts are aimed at making their organizations leaner and more efficient.

On Tuesday, UPS CFO Brian Dykes told analysts that the logistics company would offer buyout plans to drivers and lay off as many as 30,000 employees this year to "help us right-size," as the number of packages delivered for Amazon decreased.

Amazon announced its second round of layoffs in three months the next day, cutting 16,000 employees. Senior Vice President Beth Galetti wrote in an email to employees that this move aims to "eliminate bureaucracy."

Dow Chemical CEO Jim Fitterling stated on Thursday that the chemical company would advance a "comprehensive and thorough simplification of our operating model," cutting 4,500 employees.

Job Market Stalls After Post-Pandemic Expansion

Many companies expanded rapidly after the pandemic began in 2020; online shopping boomed, and large-scale stimulus measures brought a surge in hiring in the turbulent period following the COVID crisis peak.

But over the past year, the labor market has stalled. Trade and AI uncertainties have made employers reluctant to hire or lay off employees. Unemployment and jobless claims have risen, but both remain below pre-pandemic levels.

Federal Reserve officials said Wednesday that the January unemployment rate fell to 4.4% from November's 4.5%, showing "some signs of stabilization." However, the hiring slowdown has made unemployment experiences more difficult, and signals of a weakening job market are accumulating.

The U.S. economy added just 50,000 jobs in December. As hiring slows, the median duration of unemployment extended to 11.4 weeks last month, the longest since 2021.

Signs of a Cooling Job Market Emerge

Indeed economist Aidala pointed out that although overall layoff data is not abnormal, "unemployment (or simply the prospect of unemployment) is a much tougher experience for workers than the aggregate indicators alone suggest." In an environment of slower hiring, getting re-employed becomes more challenging.

Over the past year, the labor market has been in a wait-and-see mode due to uncertainties around trade and AI, with employers unwilling to make large-scale hires or layoffs.

But this week’s wave of intensive layoff announcements indicates that as pressure from AI investments mounts, companies are breaking this balance and actively cutting costs.

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