Forbes: Layoffs hit 10-month high as financial and tech companies slash jobs

January was one of the largest months for layoffs in almost 15 years, a new report by Challenger, Gray & Christmas said, as more than 82,000 people, largely in the technology and financial services sectors, were let go from their jobs, Forbes informs.

In January 2024, there were a total of 82,000 layoffs in large companies:

A total of 82,307 people were laid off from U.S.-based employers last month, the report says, with companies citing restructuring, closing, market conditions and cost-cutting as the largest reasons for dramatic staffing changes.

With the exception of January 2023, when 102,943 job cuts were announced, last month saw the highest number of layoffs since January 2009, when 241,749 people lost their jobs.

Financial companies announced the most cuts in January (23,238), followed by the technology sector (15,806), food production industry (6,656) and retail sector (5,364).

Hirings. U.S. employers announced plans to hire 5,376 workers in January, according to Challenger, Gray & Christmas, down significantly from January 2023, when companies had plans to hire 32,764 people.

224,000. That’s how many Americans applied for unemployment at the end of January, according to federal data, a nearly three-month high. There were 199,000 unemployment claims in the last week of January 2023, but this year's number is lower than the same time in 2022 (233,000) and 2021 (803,000).

Despite the layoffs, the unemployment rate remains low — well below levels at the start of the pandemic in 2020 or the financial crisis 15 years ago. Unemployment was 3.7% in December, according to the latest jobs report, the same as November and below estimates of 3.8%. The federal government will release January’s unemployment data on Friday. The Federal Reserve is projecting the unemployment rate will hit a mean 4.1% by the end of 2024, which would make it the first time unemployment broke 4% since February 2018.

The Federal Reserve's decision to hike interest rates to decades-long highs last year — part of a bid to get inflation under control — has contributed to a general slowdown in economic conditions. High interest rates typically correlate with an uptick in the unemployment rate, but unemployment remains well within the historic range and economic experts predict an expected decline in rates will allow the labor market to remain fairly strong despite the spate of layoffs across sectors. When Fed officials will decide to lower benchmark interest rates is still unclear, but a slowing growth of pay and benefits for American workers could pressure the agency to make changes sooner rather than later.

January 2024 was littered with corporate job cut announcements across sectors. PayPal said it plans to cut 2,500 workers over the next 12 months, Microsoft announced plans to cut 1,900 positions and online store WayFair told employees it would slash 1,650 jobs. Amazon last month announced plans to cut “several hundred” workers from its Prime Video, MGM Studios and Twitch departments. Shipping company UPS announced 12,000 layoffs this week and American Airlines said it will cut the jobs of 656 customer support employees. In the financial sector, Citigroup is set to cut 20,000 from its staff and BlackRock said layoffs will impact about 600 people.

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