A new wave of workforce reductions is sweeping across the U.S. labor market as companies intensify restructuring efforts centered on efficiency and automation. Data from consulting firm Challenger, Gray & Christmas show that announced layoffs by U.S.-based employers surged 118% compared to the same month last year, reaching 108,435 in January—the highest January figure recorded since 2009.
The sectors most affected were transportation, technology, healthcare, chemicals, and media, according to the report.
Drivers: Economic Pressure, Restructuring, and the “AI Transition”
The primary reasons cited for layoffs included “contract losses, market and economic conditions, restructuring, and store/unit/department closures.” Companies also pointed to “the transition to artificial intelligence applications” and tariffs as contributing factors.
White-Collar Jobs Under Pressure
Amid ongoing economic volatility, many companies are increasing investments in artificial intelligence and using productivity gains to streamline corporate structures. Weak consumer spending, cost pressures, and expectations of economic slowdown are further accelerating restructuring efforts.
As AI and automation reshape white-collar roles, employment in these segments is narrowing, intensifying competition in an already rapidly evolving labor market.
Major Companies Announce Workforce Reductions
Amazon: Reducing Management Layers
On January 28, Amazon announced plans to cut approximately 16,000 jobs worldwide. In a message to employees, Senior Vice President of People Experience and Technology Beth Galetti cited the need to “reduce management layers, increase individual accountability, and eliminate bureaucracy that slows decision-making.” The company had previously laid off 14,000 white-collar employees in October 2025 and signaled that additional cuts could follow in 2026.
Dow: Focus on Automation and AI
Chemical manufacturer Dow Inc. announced on January 29 that it plans to cut approximately 4,500 jobs, stating that business processes will be improved through automation and artificial intelligence to reduce costs and enhance efficiency.
Meta: Shifting Resources Toward AI-Driven Products
According to U.S. media reports, Meta plans to reduce roughly 10% of its workforce in the Reality Labs division. The move is reportedly part of a broader strategy to shift resources from metaverse and virtual reality initiatives toward AI-powered wearables and mobile technologies.
Pinterest: Reallocating Resources to AI-Focused Roles
On January 26, Pinterest announced workforce reductions and office space downsizing as part of a restructuring plan. In its filing with the SEC, the company stated that the measures aim to “reallocate resources to AI-focused roles and teams, prioritize AI-driven products and capabilities, and accelerate the transformation of its sales and go-to-market strategy.”
UPS: Up to 30,000 Job Cuts and Expanded Automation
Logistics company UPS said on January 27 that it plans to reduce its workforce by up to 30,000 employees this year. CFO Brian Dykes noted that closing approximately 24 facilities in the first half of the year and expanding automation across its network are among the cost-reduction measures. UPS had previously reported eliminating 48,000 jobs last year, including about 34,000 operational roles.
Other Restructuring Announcements
-
HP announced in November 2025 plans to reduce its global workforce by 4,000 to 6,000 employees, citing company-wide initiatives leveraging AI to improve customer satisfaction, innovation, and efficiency.
-
Verizon revealed plans to cut more than 13,000 jobs, with CEO Dan Schulman emphasizing the need to simplify operations and reposition the company to better serve customers.
-
Nike is set to lay off 775 employees, stating, “We are accelerating the use of advanced technology and automation and investing in the skills our teams will need in the future.”
-
Tyson Foods announced the closure of a beef plant in Lexington, Nebraska, affecting approximately 3,200 employees, and scaling back operations at its Amarillo, Texas facility, impacting around 1,700 workers.
-
American Airlines confirmed workforce reductions at its Fort Worth headquarters, with U.S. media reporting that “hundreds” of employees will be affected.
-
Citigroup eliminated around 1,000 positions in January and signaled further reductions, stating that the changes reflect “efficiency gains achieved through technology and progress in our transformation toward a target operating model.”
-
T-Mobile notified Washington state authorities that 393 employees will be laid off in April due to “changing business needs.”
-
Walmart said restructuring in New Jersey will affect 100 employees in its Hoboken office.
-
Target announced it will eliminate approximately 500 positions in distribution centers and regional offices while investing more in store-level employees to improve customer experience.
