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

Job cuts in the United States reached an alarming level in January 2023, reflecting a potential challenge for the stability of the labor market.

According to Challenger, Gray & Christmas, a job outplacement firm, planned layoffs reached a total of 82,307 for the month, representing a significant increase compared to December 2023.

Although the number was lower than the same period in 2022, it marked the second-highest layoff statistic and the lowest projected hiring level for January since data records began in 2009.

The technology and finance sectors were hardest hit, with several renowned companies like Microsoft, Alphabet, PayPal, Amazon, and UPS announcing workforce cuts.

The cuts were attributed to economic trends, automation, AI adoption, and cost-cutting measures.

Financial sector layoffs were the worst since 2018, while tech layoffs were the highest since May 2023.

The food production industry also saw notable layoffs, reaching the highest level since 2012, impacted by rising costs, automation, climate change, and immigration policies.

The news comes amid ADP’s report, released on Wednesday, which indicated a slight increase in private payrolls for January, but below estimates.

Investors will be closely monitoring the Labor Department’s nonfarm payrolls count on Friday, projected to show moderate growth.

Additionally, weekly unemployment claims increased, highlighting the potential impact of the layoffs on the overall job market.