A new era of corporate cost-cutting is hitting American workers head-on. From Amazon.com to United Parcel Service Inc, major corporations are implementing layoffs, aiming to shrink their workforce after years of rapid expansion. During the pandemic in 2020 and 2021, companies engaged in massive hiring sprees and offered substantial pay raises, fearing they would face a shortage of skilled workers if they moved too slowly. Now, some companies openly admit they over-hired during that frenzy, with their primary concerns shifting to organizational bloat and runaway expenses. "Many of these companies are finding that they simply became too large," said Guy Berger, a senior researcher at the think tank Burning Glass Institute. Amazon.com announced this past Wednesday that it would cut an additional 16,000 corporate jobs, following the 14,000 layoffs last autumn; combined, these two rounds represent about 10% of its corporate staff. On Tuesday, United Parcel Service Inc stated that, after eliminating 48,000 positions last year, it expects to cut another 30,000 this year, citing a need for "size optimization." Also on Tuesday, the social media company Pinterest announced plans to reduce its workforce by up to 15%. For months, corporate executives and labor economists have debated whether, and when, advancements in artificial intelligence would trigger mass layoffs, but this concern has not yet materialized in a significant way. For now, at least, the core reason for the job cuts remains corporate overstaffing. The technology and logistics sectors, which saw the most dramatic hiring increases during 2020-2021, are now experiencing the deepest cuts. According to the outplacement firm Challenger, Gray & Christmas, U.S.-based companies announced a total of 1.2 million layoffs in 2025, the highest annual figure since 2020. The tech sector led private industries with 154,445 job cuts, followed closely by the warehousing industry with 95,317 eliminations. "This is still related to the over-hiring or hiring boom that occurred in the initial post-pandemic period," stated Laura Ullrich, Head of Economic Research at the job platform Indeed. Chief executives privately insist that their companies remain oversized and overly bureaucratic. Many executives, while announcing layoffs, claim these actions will enhance operational efficiency and grant employees greater autonomy. Beth Galetti, Amazon.com's Senior Vice President of People Experience and Technology, wrote in a memo to staff on Wednesday that the latest cuts aim to streamline management layers and reduce bureaucracy. She added, "Some may ask whether this means we are entering a new rhythm of announcing large-scale layoffs every few months; that is not our plan." Starbucks CEO Brian Niccol indicated that hiring at the company's headquarters support centers would likely slow, with future job growth concentrated more in its retail stores. In an interview on Wednesday, he stated that Starbucks needs to explore how technology can optimize staffing and improve labor efficiency. Since Niccol became CEO in September 2024, Starbucks has conducted two rounds of layoffs. By many measures, the U.S. job market remains relatively healthy. Layoffs are highly concentrated in a relatively small number of large firms, and overall job losses are low by historical standards. Although the unemployment rate has risen compared to 2024, it remains well below pre-pandemic levels. Even as prominent companies like Amazon.com announce cuts, numerous firms in other sectors are holding onto their workforce. Nevertheless, hiring activity has stalled. Those who lose their jobs now often struggle to find new positions, leading to longer periods of unemployment. Data from the U.S. Labor Department shows the average duration of unemployment reached 24.4 weeks in December, up significantly from 19.4 weeks in December 2022. Lisa Simon, Chief Economist at labor analytics firm Revelio Labs, noted that high interest rates and uncertainty surrounding tariff policies continue to weigh on the job market, causing more companies to pause hiring. Companies are also pouring billions of dollars into artificial intelligence, shifting investment towards technology and away from human resources. Pinterest announced on Tuesday it would cut up to 15% of its workforce, approximately 700 jobs, to reallocate resources towards AI-related roles and products. In a regulatory filing, the company stated it is "prioritizing AI-driven products and features" and accelerating a shift in its sales model. Some economists and CEOs believe that as AI adoption spreads, more roles are at risk of displacement, and the wave of corporate layoffs in the U.S. is only just beginning. Economists at Goldman Sachs estimate that in 2025, within the industries most affected by AI, the technology will cause a net loss of 5,000 to 10,000 jobs per month; they project this figure will rise to 20,000 per month in 2026. In a recent report, the Goldman economists wrote that, long-term, AI could displace 6% to 7% of all current jobs, though the technology is also expected to create new employment opportunities by spurring economic growth. Dan Schulman, CEO of Verizon Communications, stated during a panel discussion at the World Economic Forum in Davos, Switzerland last week that the job market is changing at an incredibly rapid pace, and more disruption is almost inevitable. The company announced plans last November to cut over 13,000 jobs, its largest layoff in history. "If you tell your employees that their jobs won't be impacted at all, I think you lose all credibility," Schulman said during the panel. "Every employee knows that impact is coming. This is just the beginning; a year from now, everything will look completely different." He added, "Machines will be able to do most of the jobs that we humans do, better than we can do them." For the moment, however, companies continue to attribute the problem to the aggressive hiring of recent years. During the pandemic, logistics firms expanded massively as Americans shopped online for everything from exercise bikes to restaurant meals. But economists note that recent tariff uncertainty and trade tensions have hurt the sector, while increased automation means companies need fewer human workers. Nike announced this week it would lay off 775 employees, primarily at distribution centers in Tennessee and Mississippi. The athletic wear company is progressively introducing more advanced automation and striving to streamline its operations. Nike stated these cuts, representing about 1% of its total workforce, are part of a broader transformation plan aimed at returning the company to a path of long-term profitable growth. Andy Decker, CEO of the recruiting firm Goodwin Recruiting, which serves employers across various industries, said, "I do believe that for the foreseeable future, large companies will continue to push for leanness, and this process will also create new types of jobs." When Decker and his colleagues speak with job seekers, they emphasize that individuals may need to pursue different types of work in the future. "In today's job market, people must realize that the job they did in the past may not be the job of the future," he said. "Everyone must continually focus on upskilling and transitioning."
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