The long-talked-about “no-hire, no-fire” phase in the U.S. labor market appears to be fading fast. January records the highest number of layoffs in 17 years, a sobering milestone that suggests employers are entering 2026 with caution rather than confidence.
According to fresh data from Challenger, Gray & Christmas, U.S. companies announced 108,435 layoffs in January, marking the worst January since the aftermath of the 2009 financial crisis. That figure represents a staggering 118% jump compared to January 2025, highlighting just how sharply workforce strategies have changed in a short span of time.
Hiring Freezes Deepen Across Industries
While layoffs surged, hiring nearly vanished. Employers reported only 5,306 new hires in January—the lowest January total since 2009, when Challenger first began tracking the data. The numbers paint a clear picture: companies are pulling back not just on expansion, but on replacement hiring as well.
The transportation sector led the cuts, largely driven by UPS, which plans to slash more than 30,000 roles. The technology industry followed closely behind after Amazon announced 16,000 job reductions, reinforcing the idea that even once-resilient sectors are tightening budgets.
Employers Brace for an Uncertain 2026
Andy Challenger, a senior executive at Challenger, Gray & Christmas, told CNBC that the unusually high layoff total reflects decisions made at the end of 2025. In his view, employers are clearly “less-than-optimistic about the outlook for 2026,” choosing to cut costs early rather than risk overextending later.
Additional warning signs are emerging in unemployment data. Initial jobless claims reached 231,000 for the week ending January 31, the highest level since early December. While a severe winter storm likely played a role in the spike, the timing aligns uncomfortably well with the surge in layoff announcements.
What This Means Going Forward
Together, these signals suggest the labor market is entering a more defensive phase. With January records the highest number of layoffs in 17 years, companies appear focused on preservation, not growth. For workers, that means heightened competition, slower hiring, and a job market that may feel very different from the relative stability of recent years.
