Report: January Job Cuts Were Highest Since 2020

The wave of layoffs announced by employers last month was the highest since 2020.

U.S. based companies cut 102,943 jobs in January, a 136% increase from December 2022 and a 440% increase from January of last year, the employment service Challenger, Gray & Christmas (CGG) said in a report released Thursday (Feb. 2).

According to the report, last month’s layoffs were the most for a January since 2009, when 241,749 cuts were announced. It is the highest monthly total since September 2020.

“We’re now on the other side of the hiring frenzy of the pandemic years,” said Andrew Challenger, CGG’s senior vice president. “Companies are preparing for an economic slowdown, cutting workers and slowing hiring.”

Most of last month’s cuts came from the technology sector, which slashed 41,829 jobs, or 41% of January’s layoffs. That’s a 158% increase since December.

“Since November 2022, which saw the highest monthly total for the sector since Challenger began tracking in 1993 with 52,771, technology companies have announced 110,793 job cuts,” the report said.

Last year saw the tech sector cut 153,000 jobs, a trend that continued through last month, which saw giants such as Microsoft and Google eliminate positions.

“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” Microsoft CEO Satya Nadella wrote in a message to employees as the company eliminated 10,000 positions.

“We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” he said.

Also anticipating a recession are American lenders, PYMNTS noted earlier this week. They’re setting aside more funds to cover loan losses, anticipating an end to record low unemployment.

“We definitely have been tightening our credit standards,” Discover Chief Executive Roger Hochschild said in an interview with the Wall Street Journal. “We’re always looking for pockets of stress.”

Among those signs of stress: an increasing share of higher-income Americans — 51% — who say they live paycheck to paycheck.

PYMNTS research shows that at the end of 2022, 9.3 million more U.S. consumers were living paycheck to paycheck than at the end of 2021, with 8 million of these consumers earning north of $100,000 a year.