U.S. Job market shock: AI cited in 7,600 layoffs amid 108,000 cuts in January

The figure is also 205% higher than December 2025, when 35,553 job cuts were recorded, and represents the highest total for January since 2009, when 241,749 cuts were reported. It is also the largest monthly total since October 2025, which saw 153,074 layoffs.

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. Most of these plans were likely set at the end of 2025, signaling that employers are less-than-optimistic about the 2026 outlook,” said Andy Challenger, workplace expert and Chief Revenue Officer of Challenger, Gray & Christmas.

Industry-wise breakdown

Transportation led with 31,243 cuts, primarily driven by UPS, which announced 30,000 layoffs following the end of its partnership with Amazon.

Technology followed with 22,291 cuts. Challenger noted, “While CEOs like Andy Jassy have mentioned that AI may cost jobs in the coming years, this cut seems driven more by overhiring and organizational restructuring than by new technology.”

AI and job losses

Artificial Intelligence was cited as a reason for 7,624 job cuts in January, accounting for 7% of total layoffs, the report said.

In 2025, companies cited AI in 54,836 announced layoffs, and since tracking began in 2023, AI has been referenced in 79,449 job cut announcements, representing 3% of all layoffs during this period.

Challenger added, “It’s difficult to determine the precise impact of AI on layoffs. While leaders frequently discuss AI, many companies aim to implement it operationally, and the market appears to reward firms that mention it.”