Job Cuts Skyrocket Across America Amid Rising Costs

Companies across the country are continuing to cut jobs as they seek new ways to lower their operating costs.

Challenger, Gray and Christmas Inc. — an outplacement firm — reported recently that employers cut jobs dramatically in January as rough economic conditions persist.

In January, 82,307 positions were cut compared to only 34,817 in December, according to a report from the firm. That represents a big jump of 136%.

The company further said that the cuts came while layoffs are continuing to surge due to major economic struggles such as inflation as well as adjusting to automated services.

Andrew Challenger, the senior vice president of the company, pointed out in the report:

“Waves of layoff announcements hit U.S.-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.”

He also pointed out, though, that the layoffs are driven in large part by “broader economic trends” as well as the fact that many sectors are starting to adopt artificial intelligence and automation technologies.

“In most cases, companies point to cost-cutting as the main driver for layoffs,” he added.

The financial industry was the sector responsible for the most January job cuts, with 23,238 employees being laid off last month. The report said that represented the highest total for any one month since way back in September of 2018.

Technology companies were responsible for the second-most layoffs, with 15,806 total jobs being cut. That represented a huge 254% increase from the number of layoffs in December.

The report also said that employers in the U.S. only planned to hire 5,376 workers last month, which marked the lowest total for any January on record. At the same time, that represented a 78% increase over December’s numbers..

Another potentially positive of the report is that the total number of layoffs in January was actually down 20% year-over-year.

One of the biggest challenges for businesses at the outset of 2024 is persistently high inflation. While it’s come down in recent months, it still remained at 3.4% up year-over-year in December, which is well above the 2% target that the Federal Reserve sets.

The current benchmark interest rate is set between 5.25% and 5.50%, which has increased the cost of borrowing money, which has in many ways stunted economic growth.

As businesses have been unable to borrow money — or as they’ve had to pay higher costs to do so — they’ve had to find other ways to cut costs to remain above water. And laying off workers seems to be one of the most popular ways to do so.

Many very large companies in the U.S. announced rounds of layoffs last month, including media outlets such as The New York Daily News, Insider, Forbes and the Los Angeles Times.