By Megan Leonhardt
Recent layoff announcements from tech behemoths Meta and Microsoft have contributed to fears that the U.S. labor market could be in jeopardy.
So far this year, in fact, about 98 tech companies have announced plans to cull nearly 92,3000 employees, according to the job loss tracking site Layoffs.fyi. Companies like Oracle, Snap, Amazon and Block have contributed thousands of jobs toward that figure.
But the latest economic data show the labor market more broadly -- beyond tech -- is not falling apart. There may even be signs of a tepid recovery afoot.
Layoffs are never a healthy sign, but it's worth noting that the tech sector only makes up about 6% of the total U.S. workforce. Moreover, for the last 10 years, an average of about 1.85 million people are laid off each month. So far this year, monthly layoff totals have averaged just under 1.7 million workers per month, according to the Bureau of Labor Statistics.
Challenger, Gray & Christmas reports that there were 217,362 layoffs in the first quarter of 2026, the lowest first-quarter total since 2022. The number of Worker Adjustment and Retraining Notification (WARN) notices -- the required notification of planned layoffs required of employers -- have been trending down over the past three months, according to data from Revelio Labs. Additionally, the overall number of Americans filing for unemployment benefits show no real signs of weakening in the U.S. labor market.
"There's still not a layoff problem in the U.S. economy," Jeff Korzenik, Fifth Third's chief economist, tells Barron's. Korzenik believes the recent tech layoffs are the natural result of employers carrying more workers than needed -- in some cases, for years.
In fact, rather than stemming from increased benefits of artificial intelligence utilization as some of the recent layoff announcements would suggest, Wolfe Research's Chris Senyek believes that the recent tech layoff announcements can be attributed to a "renormalization" in technology company employees.
"Said differently, after years of over-hiring and retaining employees when labor was scarce, companies are returning to a more efficient labor force," Senyek writes.
But rather than mass layoffs, Korzenik says, the majority of U.S. employers are resolving this labor imbalance through low hiring and backfilling fewer positions. The economic data bear this out.
The number of workers filing for the initial round of unemployment benefits was 214,000 for the week ending April 18, according to data from the Labor Department released Thursday. That was a bit higher than the revised level of 208,000 initial jobless claims hit during the previous week, but still down 10,000 from the same week a year ago and well below the long run average of 220,700 per week.
That's a good sign, not only in terms of tamping down concerns over recent tech layoffs, but also as a sign that the higher oil prices and supply chain challenges resulting from the Iran war have not yet forced employers to pull back on labor.
"We are now well into the timeframe when companies might have started layoffs due to geopolitical uncertainty and spiking oil prices, but that clearly has not happened. The American labor market remains in 'low fire' mode," writes Nicholas Colas, co-founder of DataTrek Research.
Although initial jobless claims tend to hew closest to layoff trends, the total number of workers who are collecting unemployment benefits -- tracked as continuing claims -- is also a good indicator of labor market health. Continuing claims continue to be lower now than at the start of the year. In fact, the four-week moving average of continuing claims is still near its lowest level since June 2024. That signals that those who do lose their jobs are finding new ones more easily, writes Ed Yardeni, president of Yardeni Research. He believes this is evidence that hiring activity may be starting to improve.
Korzenik believes that companies will continue to work through issues of labor hoarding and AI disruptions over the next couple of years, but he points out that the U.S. has a more structural labor supply problem in the form of an aging population. Korzenik says that up until now, the U.S. has largely patched over the challenges that fewer younger workers bring by using foreign-born workers. But with the Trump administration's crackdown on both legal and illegal forms of immigration, the supply of available workers has been diminished.
Unemployment among younger workers, particularly college graduates, has been uncomfortably high in recent years. While some initial research had suggested that is due to the effects of AI eliminating entry-level jobs, many economists believe the lack of labor demand, labor hoarding, and a skills mismatch between retiring workers and those entering the workforce are more to blame. Fewer immigrants and more retiring workers could put pressure on the demand for younger workers in the coming years, lowering youth unemployment.
Still, there's not enough focus on the risk of outflows, Korzenik says. The rate of immigrants who are opting for "self deportation" increased by a factor of 28 in 2025 compared with 2024, according to statistics gathered by the Deportation Data Project.
"This could accelerate dramatically -- in which case, not only do we have to worry about the flows of labor, we have to worry about the stock of labor," Korzenik says.
Write to Megan Leonhardt at megan.leonhardt@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 27, 2026 12:16 ET (16:16 GMT)
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