The job market lost more than 80,000 jobs in January, up 136 percent from one month prior, with the biggest losses seen in finance and technology, and the biggest reason reported as company restructuring.
American companies announced 82,307 job cuts in January, more than double the 34,817 job cuts in December, according to a report from career specialists Challenger, Gray & Christmas Inc. The plans for new hiring in January amounted to 5,376 jobs.
This is the “highest number of job cuts announced in January since January 2009, when 241,749 cuts were announced in the first month of that year,” according to the report, referring to the upheaval in the job market during the 2007–2009 recession.
“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter. … These layoffs are also 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,” the report said.
The role of artificial intelligence (AI) was also mentioned as a cause for 381 job cuts in January. Since AI was first mentioned as a cause of job losses in 2023, the firm has counted a total of 4,628 job cuts due to the new technology.
The leaders on the list were financial companies with 23,238 job cuts in January. This is a high point for the industry in a five-year interval, with only September 2018 being the most recent month of even more cuts, with 27,343.
An example is Citigroup, which said it would slash 20,000 jobs, or 10 percent of its workforce, by the end of 2026, following its worst quarterly financial results in more than a decade.
Citi reported a $1.8 billion net loss in the fourth quarter of 2023, according to its latest financial filings. The bank expects the layoff to save as much as $2.5 billion over the long term.
The reductions are part of a reorganization effort announced last year to cut bureaucracy, increase profits, and improve the company’s stock price.
Technology jobs remained in the top spots, with 15,806 cuts in January, up 254 percent from the 4,470 cuts announced in the industry in December.
Following that is the food industry, which announced 6,656 layoffs, the highest since November 2012, when 19,709 cuts were reported, mostly on plant closings.
“High costs and advancing automation technology are reshaping the food production industry,” the report said.
Retailers announced 5,364 job cuts in January, followed by the media industry, which includes television, film, streaming, and news. Media announced 836 job cuts in January, down 24 percent from the 1,093 announced in December.
News, which includes digital, broadcast, and print, announced 528 layoffs in January, up 1,660 percent from the 30 tracked in December.
Causes
“Restructuring” was the most-cited reason for job cuts with 28,329, around 40 percent of all job cuts, followed by unit closing which accounted for 14,555 cuts.
As mentioned earlierr, AI was reported as another reason for layoffs, with the report saying that “the impact of rapidly advancing artificial intelligence adoption is beginning to be felt from a jobs perspective, particularly in Media and Tech, but truly across sectors.”
