January hiring was the lowest for the month on record as layoffs surged

January hiring was the lowest for the month on record as layoffs surged

A UPS driver makes a delivery in Miami Beach, Florida on January 30, 2024.

Joe Raedle | Getty Images

Companies announced the highest job cuts since the start of 2023 in January, a potential flashpoint for a job market that will be in focus this year, according to a report from Challenger, Gray & Christmas on Thursday.

The job placement firm said planned layoffs this month totaled 82,307, up 136% from December but still down 20% from the same period a year ago.

It was the second-highest number of layoffs and the lowest planned hiring rate for January since 2009 data.

Technology and finance were the hardest hit sectors, with high-profile Silicon Valley executives such as Microsoft, alphabet and PayPal announced staff cuts at the beginning of the year. Amazon also said it would make the same cuts UPS in the month with the most layoffs since March 2023.

“After a quiet fourth quarter, U.S.-based companies were hit by a wave of layoff announcements in January,” said Andrew Challenger, senior vice president of the company. The cuts were “driven by broader economic trends and a strategic shift towards increased automation and AI adoption across sectors, although in most cases companies cite cost cutting as the main reason for layoffs.”

Layoffs in the financial sector totaled 23,238, the worst month in the category since September 2018. Tech saw a total of 15,806 layoffs, the highest since May 2023. Food manufacturers reported 6,656, the highest since November 2012.

“High costs and advancing automation technology are transforming the food production industry. “In addition, climate change and immigration policies are impacting labor dynamics and operational challenges in this sector,” Challenger said.

The report follows news from ADP on Wednesday that private payrolls increased by just 107,000 this month. On Friday, the Labor Department will release its nonfarm payrolls count, which is expected to show growth of 185,000.

Initial jobless claims totaled 224,000 in the week ending Jan. 27, up 9,000 from the previous week. Continuing claims, which are a week behind, rose by 70,000, the Labor Department reported Thursday.

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2024-02-01 15:10:13