The Challenger report on announced layoff intentions shows a 28.4 percent increase to 49,795 in January after 38,792 in December but is down 51.6 percent compared to 82,307 in January 2024. Overall, layoff activity is relatively quiet and broad-based. A few sectors are continuing to restructure to cut costs and/or underperforming locations. However, many businesses anticipate replacing lost workers at a future time could be more expensive than keeping current workers on payroll.

Layoff announcements in January are led by 7,488 in technology, continuing the trend of contraction in the sector as businesses integrate AI into their operations. The trend does not seem to be over yet.

The largest share of reasons cited for layoffs are 16,123 in closing and 12,618 in restructuring. The two categories accounted for over half of all job cut plans.

Hiring intentions are soft at 6,089 in January, down 23.9 percent from 7,999 in December but up 13.3 percent from 5,376 in January 2024. The 2,780 hiring plans in technology in January account for nearly half of all intentions. Some of the plans to hire tech workers may come at a time when the supply of labor in this field makes it less fiercely competitive and some businesses are hoping to fill long vacant openings.

This monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state departments of labor. The job-cut report must be analyzed with caution. It doesn't distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs. Also, the job-cut report does not include jobs eliminated in small batches over a longer time period. Unlike most economic data, this series is not adjusted for seasonal variation.

The job-cut report is basically a rehash of the weekly jobless claims report but provides additional insight into where layoffs are occurring. There is industry and geographic (states) detail that is not available with weekly jobless claims.