Why are so many companies shedding employees if the economy is strong?

The report stated that layoffs are up 118% from the same period last year and 205% from December 2025. On the inverse side, employers added 5,306 jobs, the lowest since January 2009. It’s important to note that Challenger began tracking labor data in January 2009.  “Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” said Andy Challenger, the workplace expert and chief revenue officer of the company. “It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026.” Transportation had the most cuts in January at 31,243, according to the report. The majority of these cuts came from UPS’s major layoff announcement.  Amazon, one of the tech industry’s largest companies, also announced significant job cuts. The company said it would lay off 16,000 workers, mostly corporate-level employees. The Challenger report said Amazon was the main contributor to the nearly 23,000 job cuts the tech industry saw last month.  The health care industry also saw large cuts, with more than 17,000 workers losing their jobs. That was the largest staff reduction for the industry since April 2020, the report stated.  “Healthcare providers and hospital systems are grappling with inflation and high labor costs,” researchers wrote. “Lower reimbursements from Medicaid and Medicare are also hitting hospital systems. These pressures are leading to job cuts, as well as other cutting measures, such as some pay and benefits.”