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Financial Sector Job Cuts in January Highest Since September 2018

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Financial companies cut more jobs in January than in any month since September 2018.

Companies in this sector announced 23,238 layoffs during the first month of the year, global outplacement and business and executive coaching firm Challenger, Gray & Christmas said in a Thursday (Feb. 1) press release.

This happened during a month in which U.S.-based employers, in all industries, cut 82,307 jobs — more than double the amount they cut in December, according to the release.

Compared to previous Januarys, this year’s layoff total was the second highest since January 2009, behind only the 102,943 job cuts announced in January 2023, the release said.

“Waves of layoff announcements hit U.S.-based companies in January after a quiet fourth quarter,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in the release.

Cost cutting was the main driver for layoffs across industries, Challenger said. Other factors that contributed to January’s job cuts were broad economic trends, increased adoption of automation and artificial intelligence (AI), and, in an election year, companies’ anticipation of policy changes that may affect their industries. 

The total of 23,238 job cuts made by financial companies was the most announced by any sector in January, the release said.

The technology sector announced the second-highest number of layoffs, with 15,806. That was the most job cuts made in that sector since May. 

Three other sectors included in the release that announced layoffs in January included the food production industry (6,656), retail (5,364) and media (836). 

“Last month, ‘restructuring’ was the most-cited reason for job cuts with 28,329, followed by plant, store and unit ‘closing,’ which accounted for 14,555 cuts,” the release said.

Among the companies that said they were restructuring in January were spend management company Brex, which laid off 20% of its workforce; enterprise application software provider SAP, which said 8,000 employees will be either retrained or leave the company; and Amazon, which cut less than 5% of the staff in its Buy with Prime unit as part of its ongoing restructuring efforts.

“We regularly review the structure of our teams and make adjustments based on the needs of the business and, following a recent review, we’ve made the difficult decision to eliminate a small number of roles on our Buy with Prime team,” an Amazon spokesperson said.