Major U.S. corporations are accelerating workforce reductions into 2026, reversing the explosive hiring of the pandemic era amid economic headwinds and artificial intelligence advances. Amazon confirmed 16,000 corporate job cuts on January 28, completing a plan for around 30,000 since October 2025, as it trims management layers to fund AI investments, according to Reuters. UPS announced plans to eliminate up to 30,000 jobs and close 24 facilities this year, building on 48,000 cuts in 2025, while shifting away from low-margin Amazon deliveries, per Reuters.

These moves reflect a broader retrenchment. U.S. employers announced 1.2 million job cuts in 2025, the highest since 2020, with technology leading at 154,445 and warehousing at over 95,000, data from outplacement firm Challenger, Gray & Christmas shows, as reported by Challenger, Gray & Christmas. Hiring announcements hit the lowest year-to-date total since 2010 at 497,151 through November.

Executives cite pandemic-era overhiring as the primary culprit. “A lot of these companies found that they are too big,” said Guy Berger, a senior fellow at the Burning Glass Institute, in the original Wall Street Journal analysis. Amazon’s Beth Galetti wrote in a staff note that cuts target bureaucracy, not a recurring rhythm.

Pandemic Hiring Hangover Persists

Companies binged on labor in 2020-2021, fearing talent shortages amid remote-work booms and e-commerce surges. Logistics firms like UPS expanded for online orders, but demand normalized, tariffs loomed, and automation advanced. Nike plans to cut 775 distribution jobs in Tennessee and Mississippi for advanced automation, part of a turnaround, as noted by Yahoo Finance.

Starbucks CEO Brian Niccol indicated fewer corporate hires, more cafe growth, and tech efficiencies since joining in September 2024. Pinterest targets up to 15% of its workforce, or 700 jobs, to prioritize AI products, per the Wall Street Journal.

The job market remains resilient overall, with unemployment below pre-pandemic levels, but layoffs concentrate among giants while hiring crawls. Average unemployment duration hit 24.4 weeks in December 2025, up from 19.4 weeks in December 2022, Labor Department data shows.

AI Emerges as Layoff Catalyst

Artificial intelligence accounted for 54,836 U.S. job cuts in 2025, or 4.5% of total layoffs, per Challenger, Gray & Christmas. Goldman Sachs economists estimate AI drove 5,000-10,000 monthly net losses in exposed industries in 2025, projecting 20,000 monthly in 2026, potentially displacing 6-7% of jobs long-term.

Verizon CEO Hans Vestberg, succeeding Dan Schulman, oversaw 13,000 cuts in November 2025. Schulman warned at Davos: “Machines can do most anything we do better than we can do it.” Pinterest explicitly shifts resources to AI roles. Amazon’s cuts free capital for $125 billion in 2026 capex, much AI-focused, CNBC reports.

Tech led private-sector cuts, up 15% to 154,445 in 2025. A Resume.org survey found 58% of companies plan 2026 layoffs, citing tariffs (48%) and economy (47%), via Medium.

Economic Pressures Amplify Cuts

High interest rates, tariff uncertainty, and trade tensions slow hiring, says Revelio Labs chief economist Lisa Simon. Consumer sectors like retail announced 92,989 cuts, up 123%, per Challenger data in Challenger, Gray & Christmas.

December 2025 saw 35,553 cuts, down 50% from November’s 71,321, the lowest monthly since July 2024, signaling possible stabilization, but 2025’s Q4 hit highs since 2008. Hiring rose 31% in December to 10,496, highest since 2022.

Recruiters like Goodwin Recruiting’s Andy Decker advise job-seekers: “People need to realize what they’ve done might not be what they’re going to be doing forward. They’ve got to constantly be evolving.”

Sector Spotlights: Tech and Logistics Lead

Tech overhired post-pandemic; now AI pivots demand leaner teams. Intel eyes 21,000 cuts (20% workforce) for $500 million savings in 2025, $1 billion in 2026. UPS’s Amazon volume drop—another million pieces daily in 2026—drives network reconfiguration, CEO Carol Tome said.

Warehousing and retail face automation and softened demand. Over 100 firms, including Nike and Verizon, filed WARN notices for 2026 cuts, per Yahoo Finance and Business Insider.

Indeed’s Laura Ullrich attributes cuts to “overhiring… in that immediate postpandemic era.” Challenger’s Andy Challenger notes: “The year closed with the fewest announced layoff plans all year… a positive sign.”

Worker Impacts and Market Signals

Laid-off workers face longer searches amid slowed hiring. Glassdoor’s 2026 trends highlight “forever layoffs”—frequent small cuts eroding trust, with negative executive views rising, per Fortune. Jobless claims held at 209,000, historically low.

CEOs like Amazon’s Andy Jassy frame cuts as efficiency plays, not distress. UPS projects $89.7 billion revenue in 2026, up from $88.7 billion. Yet X posts amplify anxiety: “The AI replacement wave is here,” with lists of Amazon 30,000, UPS 48,000, Intel 24,000.

Economists like MIT’s Daron Acemoglu downplay mass unemployment but warn of shifts. The labor market tests resilience as firms evolve.