The U.S. labour market was under unprecedented strain in 2025–2026, when over 1.17 million workers lost their jobs the biggest annual cuts in five years. According to company announcements and independent labour monitors, layoffs are affecting the technology, logistics, retail, telecom, finance, and manufacturing sectors as companies respond to the AI revolution, cost challenges, inflation, and slowing demand.
There will be a major structural shift in the US corporate jobs in 2026
After the pandemic, what began as a labour correction has developed into a more thorough structural reset. Companies that made significant hiring decisions between 2020 and 2022 are now streamlining their procedures. The primary drivers of efficiency initiatives and job losses, according to many executives, are automation and artificial intelligence. In October 2025 alone, American employers announced over 150,000 layoffs, the highest monthly total in over two decades.
Big businesses like Amazon, Intel, Microsoft, UPS, FedEx, Verizon, and Citigroup have announced significant labour reductions. This downsizing is particularly hurting the American manufacturing sector.
While Intel alone has announced layoffs affecting up to 15% of its employees, UPS is managing a historic loss of 48,000 positions to balance declining transportation volumes and growing automation. Amazon’s strategy, which involves removing all levels of middle management in order to restore a “Day 1” startup culture, has an impact on almost 30,000 workers.
Meanwhile, Microsoft continues to reduce its cloud and gaming operations in order to fund its multibillion-dollar partnership with OpenAI. The effects are felt worldwide, even though most of these layoffs take place in the United States, particularly in the tech hubs of Silicon Valley and Seattle.
Because these layoffs are concentrated, major American cities are experiencing a localised economic cooling effect. Seattle, the home of Microsoft and Amazon, is seeing a sharp rise in office vacancies and a decline in the luxury real estate market as thousands of well-paid IT workers lose their jobs. The impact is felt in Santa Clara and San Francisco, California, where a rise in tech leavers is a result of Intel’s layoffs.
Who is most impacted by big tech and corporate America?
Major layoffs announced by major U.S. companies in 2025 and early 2026 will affect hundreds of thousands of workers. Many layoffs have targeted corporate, technical, and administrative roles that companies believe can be optimised with automation and AI tools.
As part of a strategy to adopt AI-driven efficiencies and streamline organisational layers, Amazon announced one of the largest job cuts in its history in late 2025, eliminating 14,000 corporate positions. According to some industry assessments, the overall impact could result in up to 30,000 job cuts when larger business functions are considered.
A significant player in U.S. semiconductor manufacturing, Intel is undergoing a massive reorganisation under new leadership that will eliminate about 24,000 jobs. These cuts are a part of a multi-year effort to boost competitiveness against rivals and reallocate funds to projects centred around advanced chips and artificial intelligence.
In order to reallocate funds to cloud services and AI infrastructure, Microsoft has laid off at least 15,000 workers. These layoffs impact international operations as part of a broader organisational flattening strategy to encourage faster decision-making.
Layoffs were also announced by other tech giants: Meta Platforms cut between 3,600 and 5,000 employees, indicating a shift away from previous metaverse investments towards AI and core social apps; Salesforce, IBM, and Oracle all reduced staff as part of profitability and automation strategies; and Google (Alphabet) eliminated over 1,000 positions across consumer product teams.
Additionally, the telecom and logistics sectors suffered greatly. Verizon announced about 15,000 job cuts in an attempt to streamline operations. Shipping giants like FedEx and UPS laid off tens of thousands of employees, citing network optimisation efforts and decreased cargo volumes.
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Tens of thousands of jobs outside of technology and logistics have been eliminated by companies like Citigroup and Ford as part of restructuring initiatives in banking and automotive manufacturing, including the switch to electric vehicles. Retail and consumer companies like Starbucks, Walmart, and Coca-Cola also cut staff to reduce overhead and streamline store footprints.
The increase in layoffs is due to structural changes, economics, and artificial intelligence.
Many overlapping factors are causing changes in the American labour market:
- AI and automation:
Businesses are making significant investments in AI to automate repetitive tasks and accelerate innovation. As a result, certain jobs have become outdated, particularly in customer service, corporate services, and middle management. AI-related cuts resulted in thousands of layoffs in 2025 alone, illustrating how hiring decisions are now directly impacted by technology adoption.
- Workforce Adjustment After the Pandemic:
Due to the hiring boom of 2020–2022, many businesses had enormous teams. As growth has stabilised, businesses are shifting their workforce to meet long-term needs rather than pandemic-era expansion.
3. Cost control and profit pressure:
Because of persistent inflation and rising interest rates, investors are keeping a closer eye on margins. Companies are cutting expenses and simplifying their organisational structures to sustain profitability in the face of slower economic growth.
- Global and Geopolitical Aspects:
External factors like shifting supply chains, trade disputes, and changes in US policy have also affected corporate planning. Recent global uncertainties, like the ongoing hostilities between Iran and Israel in the Middle East, erode market confidence and may indirectly affect investment and employment choices across a range of industries. (Note: the geopolitical context is inferred from macroeconomic commentary and global trading trends.)
Layoffs’ effects on the labour market and economy
The current cycle emphasises the growing significance of high-skill, AI-resilient positions in fields like data analytics, cloud engineering, cybersecurity, and machine learning. Job seekers with specialised knowledge may see an increase in demand even as routine positions decline.
However, there are challenges in the broader labour market. As employment slows and layoffs increase, many displaced workers must deal with longer job searches and increased economic insecurity. Consumer spending, a significant driver of U.S. growth, may decrease as people tighten their budgets.
Investors are viewing many layoffs as strategic repositioning rather than signs of terminal problems. Cost cutting and targeted technology investment may boost long-term competitiveness for companies that successfully adapt.
FAQs:
- In 2025–2026, which American companies announced the largest layoffs? How many jobs were affected?
A total of 1.17 million jobs were lost across industries as a result of major U.S. companies eliminating about 165,000 positions. Amazon lost 14,000 corporate jobs, Microsoft laid off 15,000 employees, and Intel plans to lay off roughly 24,000. Together, UPS and FedEx resulted in over 58,000 layoffs, which is a sign of more extensive cost and efficiency initiatives in technology and logistics.
2. What are the main reasons behind the 2025–2026 spike in layoffs in American companies?
The primary reasons for layoffs are automation, efficiency initiatives, and AI adoption. Other significant factors include margin restrictions, investor scrutiny, and post-pandemic overhiring corrections. Businesses like Meta, IBM, and Oracle shifted their attention to AI and the cloud while banks and retailers scaled back operations. Global issues like geopolitical instability make workforce planning more cautious.
