Challenger report: U.S. companies announced 108,000 layoffs in January, the highest for the same period since 2009, a month-on-month surge of 205%.

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The U.S. job market faces its toughest start since the financial crisis.

According to the Challenger, Gray & Christmas "Challenger Layoff Report" released Thursday, the number of layoffs announced by employers surged to the highest January level in seventeen years, while hiring plans dropped to the lowest level on record for the same period.

The report shows thatin January, U.S. companies announced 108,435 layoffs, a 118% surge from the same period last year and a 205% spike compared to December 2025. This is the highest January layoff figure since 2009, when the U.S. economy was at the end of its worst recession since the Great Depression.

At the same time, employers only announced plans to add 5,306 positions, also a record low for January since the firm began tracking such data in 2009. The transportation and tech industries have led this wave of layoffs, with UPS planning to cut over 30,000 jobs and Amazon announcing 16,000 layoffs mainly at the corporate level.

This data shows that despite official unemployment claim figures remaining low, companies’ pessimism about the 2026 economic outlook is turning into concrete action. The narrative of a "no hiring, no firing" labor market may be shifting.

Transport sector leads in layoffs, tech industry close behind

The total number of January layoffs is more than double the 35,500 in December 2025, indicating that companies started the year with aggressive cost-cutting measures.

Andy Challenger, Chief Revenue Officer and career expert at Challenger, said:

"We typically see a lot of layoffs in the first quarter, but this is a very high number for January. It means most plans were made at the end of 2025 and indicates that employers aren't optimistic about 2026."

By industry, the transportation sector saw the largest layoffs, mainly driven by logistics giant UPS’s plan to cut more than 30,000 jobs. The tech sector ranked second, with Amazon’s 16,000 layoffs dominating. The healthcare industry has also seen significant layoffs.

Contract losses and economic uncertainty are the main drivers of layoffs. Notably, roles related to artificial intelligence accounted for 7% of total layoffs.

Hiring intentions fall to record lows for the period

The shrinkage in corporate hiring plans is also notable. The 5,306 planned hires announced in January are down 13% from January 2025 and down 49% from December 2025, setting a record low for January in Challenger’s data. This stands in sharp contrast to the layoff surge, highlighting employers' cautious approach to human resources.

The simultaneous deterioration in hiring and layoff data suggests the labor market may be shifting from the previous "no hiring, no firing" state to a more defensive posture. Companies appear to be preparing for a potential economic slowdown, prioritizing cost control over business expansion.

Official data has yet to reflect the trend

Although Challenger data shows a clear worsening trend, it has not yet been fully reflected in official statistics. For the week ending January 24, initial jobless claims were only 209,000, near a two-year low in terms of longer-term trends.

However, Challenger data can be volatile and its correlation with official statistics is unstable. Still, Department of Labor documents received under the Worker Adjustment and Retraining Notification (WARN) Act show that over 100 companies have filed mass layoff notices in January, partially confirming the trend reflected in the Challenger data.

Recent mass layoff announcements by well-known companies such as Amazon, UPS, and Dow also contrast with the stability in official data, suggesting the labor market may be at a turning point.

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