Some big-name companies are laying off workers. Here's what it means
Amazon, UPS and Pinterest are among the companies that announced layoffs.
A series of job cuts in recent days slashed tens of thousands of workers combined at name-brand companies like Amazon, UPS and Pinterest.
The moves drew renewed attention to a sharp slowdown in the labor market, which has prompted interest-rate cuts at the Federal Reserve and concern among some observers about the health of the economy.
So far, analysts told ABC News, the cooling labor market has avoided widespread job losses, making the recent flurry of layoffs an outlier. The high-profile cuts reflect trends in tech and some other sectors, however, where companies have reversed a pandemic-era hiring blitz and pivoted in response to artificial intelligence.
“Right now, companies like Amazon and UPS are the exception rather than the rule in terms of permanent layoffs,” said Harry Holzer, a professor of public policy at Georgetown University and a former chief economist at the U.S. Department of Labor.
“It makes sense for workers to worry a little bit,” Holzer added, noting a potential workplace shakeup that could be wrought by AI, especially in tech. For now, he added, most sectors of the economy remain “uncertain” about how they’ll incorporate the technology.
Amazon said last week it planned to cut about 16,000 employees as it seeks to "strengthen" its business by reducing "layers" and "bureaucracy" within its workforce.
The announcement comes after the company laid off 14,000 corporate employees in October, marking the second significant set of job cuts in a matter of months.
Last week, UPS announced it plans to cut as many as 30,000 employees this year. Pinterest also unveiled an effort to slash 15% of its staff, according to a securities filing. The company boasts about 4,500 employees worldwide, a securities filing shows.
"We are confident that we will be able to complete our network reconfiguration plans without impeding our ability to grow in targeted markets," UPS CEO Carol B. Tomé said on an earnings call last week.
On the earnings call, UPS Chief Financial Officer Brian Dykes said the job cuts would be achieved through "attrition," meaning the company will choose not to fill vacancies as they arise.
In a statement last week, Pinterest said it is "reallocating resources to AI-focused roles and teams that drive AI adoption and execution."
Employment data is sending mixed signals about the sturdiness of the labor market, analysts said.
It is beyond debate that the economy is in the midst of a pronounced hiring cooldown. The economy added an average of 49,000 jobs each month in 2025, registering a significant slowdown from 168,000 jobs added per month in 2024, Bureau of Labor Statistics data last month showed.
Even so, only a small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the BLS. Unemployment remains low by historical standards.
Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, described the labor market as a “low-hire, low-fire environment.”
“People who have jobs are hugging onto them more than they normally would,” Ullrich said, noting a drop in the rate of workers quitting their jobs.
Meanwhile, Ullrich said, broad-based layoffs have yet to show up in employment data.
“These are big names and they get headlines, but we’re just not seeing it,” Ullrich added.
Still, the job cuts at major tech firms mark the latest in a series of layoffs top executives have attributed to AI, citing efficiency gains and shifting company priorities, some analysts said.
"What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we've seen since the Internet, and it's enabling companies to innovate much faster than ever before," Beth Galetti, a senior vice president at Amazon, said in an email to staff in October, when the company announced a previous round of layoffs.
Software company Salesforce cut 4,000 customer service jobs in September, just months after the company said AI could perform up to 50% of its work. Airline Lufthansa slashed 4,000 positions that same month, citing the "increased use of artificial intelligence."
Lynn Wu, a professor of operations, information and decisions at the University of Pennsylvania, said AI may allow some companies to “operate with fewer layers and shrink their hierarchy.”
“If you want to be at the forefront of AI, you have to learn how to use it efficiently,” Wu added.
Recent layoffs trace to another factor, analysts said: post-pandemic corporate pullback.
The job cuts stem in large part from an ongoing staff reevaluation specific to the tech industry, since sales have retreated from the blistering pace attained during the pandemic, they added. The trend also holds true for logistics companies like UPS, which added workers during Covid-19 in response to a surge in e-commerce amid stay-at-home orders.
“There was a big bump during the pandemic and there’s some settling down to a more normal level,” Holzer said.