Published February 1, 2024
U.S.-based employers announced 82,307 cuts in January, a 136% increase from the 34,817 cuts announced one month prior. It is down 20% from the 102,943 cuts announced in the same month in 2023, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
With the exception of last January’s total, this is the highest number of job cuts announced in January since January 2009, when 241,749 cuts were announced in the first month of that year.
Source: Challenger, Gray & Christmas, Inc. ©
“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter. As we step into 2024, the landscape is shaped by stabilizing prices and the anticipation of falling interest rates. It is also an election year, and companies begin to plan for potential policy changes that may impact their industries. However, these layoffs are also driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Which Industries Are Cutting Workers?
Financial
Financial companies announced the most job cuts in January with 23,238. This is the highest monthly total for the sector since September 2018, when 27,343 cuts were announced.
Source: Challenger, Gray & Christmas, Inc. ©
Technology
The Technology sector followed with 15,806, the most since May 2023, when 22,887 cuts were announced. It is up 254% from the 4,470 cuts announced in the sector one month prior.
Source: Challenger, Gray & Christmas, Inc. ©
Food
Last month, companies in the Food production industry announced 6,656 layoffs, the highest monthly total for the sector since November 2012, when 19,709 cuts were reported, mostly on plant closings.
“High costs and advancing automation technology are reshaping the food production industry. Additionally, climate change and immigration policies are influencing labor dynamics and operational challenges in this sector,” said Challenger.
Retail
Retailers announced 5,364 job cuts last month, a significant increase from December’s notably low figure of 110 cuts. It is the third-highest sector in layoff announcements in January.
Media & News
The Media industry, which includes television, film, streaming, and News, announced 836 job cuts in January, down 24% from the 1,093 announced in the industry in December. It is up 11% from the 754 cuts announced in the same month last year.
News, which includes digital, broadcast, and print, and is tracked as a subset of Media, announced 528 layoffs in January, up 1,660% from the 30 tracked in December. It is the highest monthly total since March of 2023, when 532 cuts were recorded.
Why Are Companies Cutting?
Last month, “restructuring” was the most-cited reason for job cuts with 28,329, followed by plant, store and unit “closing” which accounted for 14,555 cuts.
Artificial Intelligence was cited for 381 job cuts in January. Since the reason was first cited in May 2023, Challenger has tracked 4,628 job cuts announced due to Artificial Intelligence, either because the companies were pivoting to developing it or because it replaced tasks and roles.
“The impact of rapidly advancing artificial intelligence adoption is beginning to be felt from a jobs perspective, particularly in Media and Tech, but truly across sectors. That said, companies are not outright blaming AI for many layoff decisions,” said Challenger.
Hiring Plans Fall
U.S. employers announced plans to hire 5,376 workers in January, the lowest January total on record. It is up 78% from the 3,022 announced hiring plans in December, which was the lowest monthly total on record.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
