Despite the uptick in layoffs, the number of new unemployment claims remains relatively low. In the week ending January 31, 2026, initial unemployment claims reached 231,000, the highest level since early December 2025. However, this spike is believed to be due to severe winter storms impacting parts of the country. Long-term trends still show unemployment claims at the lowest levels since October 2024.
The labour market concerns were further heightened by the announcements from major companies such as Amazon, UPS, and Dow Inc., which all revealed substantial workforce reductions. The transportation sector saw the highest number of job cuts, largely due to UPS’s decision to lay off over 30,000 employees, while Amazon followed with a reduction of 16,000 positions, mostly in office-based roles.
Challenger’s report indicates that over 100 companies informed the US Department of Labor of significant layoffs under the Worker Adjustment and Retraining Notification (WARN) Act. This growing number of job cuts is a clear signal that the US job market is facing considerable challenges.
Additionally, the US Bureau of Labor Statistics reported a significant drop in job openings, with only 6.54 million positions available in December 2025, a decrease of 386,000 from the previous month.
Despite the increased layoffs and reduced hiring, the overall unemployment rate remains relatively low. However, this latest data paints a concerning picture for the US labour market in the coming months.