What does the January jobs report tell us about how this year is going to shake out? Forbes reported that U.S. employers announced 108,435 job cuts in January 2026, the highest January total since the 2009 Great Recession. That number represents a 118% increase from January 2025, signaling that layoffs are becoming all too common. Those numbers are adding to employees’ (and employers’) feelings of uncertainty. 

What’s going on with the labor market

This surge in job cuts doesn’t exist in a vacuum. Just think, it’s only the first month of the year and already:

• Employers with unusually high layoffs attributed them to contract losses, economic pressures, and corporate restructuring.
• There was significant hiring in January, but many companies are reporting fewer new hires than expected, with hiring plans slowing. 
• Private payrolls are stagnant, which means that while jobs are being cut, replacements aren’t coming fast enough.

Companies do not appear confident about their growth prospects and are tightening their spend on workers in response.

Other reasons behind layoffs

There appears to be a big share of cuts coming from volatile and uncertain market conditions and contract losses. Of course, restructuring happens every year. But the efforts to reduce costs are intensifying.

Lastly, some layoffs are tied to automation and the role of technology in the workplace. How work gets done is changing.

That secure feeling is hard to find

For employees, the news and internal changes can heighten anxiety about finances, job security, healthcare, and more.

Workers may be reevaluating what “security” even means to them. Because it’s not just about salaries but also benefits like health insurance and retirement plans.

Surveys over the past year have shown that workers increasingly value stability and predictable support systems, especially in uncertain economic times.

Employers feel it, too

From the employer perspective:

• Cost pressures and market uncertainty are prompting more conservative hiring and staffing decisions.
• There’s a shift toward operational efficiency.
• Employers might be weighing the cost of benefits against tighter budgets, which can create tensions in benefits strategy and retention.

Benefits become a bigger deal when retaining top talent and maintaining morale, even when headcount is frozen or reduced. But employers shouldn’t take their eye off the ball. Staying competitive and compliant has to be top priority. And we have plenty to share on how that works! 

Read more here.