U.S. employers announced 108,435 job cuts in January, a 118% increase from the same month last year and the highest January total since 2009, according to the latest report from global outplacement firm Challenger, Gray & Christmas.
The news gets grimmer: Employers announced just 5,306 hiring plans last month, the lowest total for January since Challenger began tracking hiring in 2009, based on publicly announced layoffs and hiring plans.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026,” says Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.
For HR leaders, this data isn’t just another troubling headline. It’s a signal that specific actions may be in store for their C-suite and HR teams. Here are five moves to make now.
Pressure-test your 2026 workforce plans
The January cuts were largely planned in late 2025, according to Challenger, which means many organizations are already operating on revised forecasts. If your leadership team hasn’t revisited headcount assumptions since Q4, this may be a conversation to initiate.
Transportation led all industries with 31,243 job cuts, primarily due to UPS announcing 30,000 cuts after severing ties with Amazon. Technology followed with 22,291 cuts, including Amazon’s 16,000-person reduction as it restructures management layers. Healthcare announced 17,107 cuts, the most for the industry since April 2020.
These aren’t small adjustments. They’re strategic pivots happening in real time. HR leaders should ask: Are we still working from outdated assumptions? What changed in our market or customer base that we haven’t accounted for?
Close the AI attribution gap with your C-suite
Only 7,624 job cuts in January explicitly cited artificial intelligence as the reason, representing 7% of total cuts for the month. Since 2023, AI has been cited in 79,449 job cut announcements, just 3% of all layoff plans announced in that period.
“It’s difficult to say how big an impact AI is having on layoffs specifically,” Challenger says. “We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it.”
Hidden here is a gap that HR leaders may need to close. Leadership hears that AI will solve workforce challenges, but the data shows most cuts are driven by market conditions, restructuring and contract losses, not AI displacement.
Amazon is an example of this. “CEO Andy Jassy, like many CEOs recently, has said AI will cost jobs in the coming years, but this cut appears to be due more to overhiring and reducing layers than to the new technology,” Challenger says of Amazon’s 16,000-person reduction.
Use this data to have a more honest conversation about what AI can actually do for your workforce needs in 2026 versus what it might enable in three to five years.
Build scenario plans for contract and client volatility
Contract loss drove 30,784 cuts in January, the top reason for layoffs. Market and economic conditions followed with 28,392 cuts. Together, these two categories account for more than half of all announced job cuts.
If your business model relies on major contracts or client relationships, this is your prompt to war-game what happens if one falls through. What’s the timeline for a reduction? Which roles are affected? How do you execute with dignity and minimal disruption?
The transportation sector’s experience illustrates the risk. When UPS lost its Amazon contract, 30,000 jobs disappeared. That’s not a slow erosion. That’s a cliff.
HR leaders should work with finance and operations to model dependency risks and have response frameworks ready, not scramble to build them under pressure.
Navigate tension with healthcare’s lessons
Healthcare companies announced 17,107 job cuts in January, driven by inflation, high labor costs and lower reimbursements from Medicaid and Medicare. The pressures are leading to cuts in jobs, pay and benefits, Challenger says.
“It’s very difficult for leaders of these companies to tighten budgets while not sacrificing patient care,” he added.
Even if you’re not in healthcare, this tension is universal: How do you help leadership make strategic cuts versus across-the-board reductions that damage what actually makes the business work?
HR leaders should push for workforce planning that protects core capabilities and customer experience, even when budgets shrink. That means having hard conversations about what’s essential versus what’s merely comfortable or familiar.
Reframe hiring freezes as talent opportunities
With hiring plans at their lowest January level since 2009, your competitors probably aren’t hiring either. If you have critical roles to fill, this might actually be your window, but it requires making a strategic case to leadership, not just submitting requisitions.
The data shows hiring is essentially frozen across most sectors. In that environment, HR leaders who can articulate why specific hires move the business forward will have an advantage. The talent is available. The competition for it has decreased. What’s missing is often the business case.
Regional data from the report shows where talent displacement is concentrated: Georgia saw 31,415 cuts, Michigan 19,714 and Washington 19,526. If you’re hiring in or near these markets, there’s an expanded talent pool to tap.
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