Tens of Thousands of Workers Lost Their Jobs in January

Tens of thousands of Americans have already been laid off in 2024, and economists say it could be an early sign of what's to come this year.

After shipping volume came in lower than anticipated, UPS is forcing out 12,000 employees, the company announced this month. The company said it lost more than $9 billion in revenue in 2023.

PayPal also slashed 2,500 jobs in the wake of rising competition from Apple and Zelle.

American Airlines joined the list of companies announcing layoffs this year, saying goodbye to 656 workers as it consolidates its customer service department.

Even pharmacy giant Walgreens announced that nearly 150 corporate employees would be let go as it looks to cut costs.

And just looking at tech jobs alone, Layoffs.fyi counted 28,970 jobs gone during the first 31 days of 2024.

Altogether, that's more than 40,000 Americans laid off in January alone.

Based on a new Resume Builder survey, four in 10 companies said they are likely to have layoffs in 2024. More than half of companies also said they plan to implement a hiring freeze in 2024 as fears over a recession escalate.

Why So Many Layoffs?

Layoffs have tended to concentrate in fields like tech, which saw huge bouts of hiring during the COVID-19 pandemic.

"We have to remember that tech, in particular, saw employment boom in the post pandemic period," ING Chief International Economist James Knightley told Newsweek.

The tech industry saw more than 260,000 jobs disappear in 2023, and many anticipate further layoffs.

In 2023, more than 80 percent of all the jobs created were in just three sectors—government, leisure and hospitality, and education and health care services.

But beyond industry-specific concerns, the number one reason companies end up laying off thousands is overhiring, according to David Lewis, OperationsInc CEO.

"Many of these firms tried to keep pace and in the process got a bit over their skis," Lewis told Newsweek. "In the case of UPS, Amazon and their move to take on much of their own shipping has hurt them a lot more than I think has been reported."

While Lewis said the layoffs are not indicative of a major economic downturn, there could still be worrying implications for the rest of the workforce.

"The big fear is that it creates layoff trends due to panic or fear that others are seeing softness and therefore they should also be reducing force, creating a cascading trend," Lewis said.

This has already happened in the tech sector, with major companies like Amazon, Meta, Google and Microsoft making substantial cuts to their company sizes in search of efficiency.

"There is usually a ripple effect for layoffs," Steven Chizen, a California-based employment attorney, told Newsweek. "When one large company announces a major layoff, it invites other, often smaller companies, to conduct their own layoffs."

Chizen anticipates the wave of layoffs to continue into the spring until companies reach "optimal levels" of employment.

How to Protect Yourself

Worried employees might feel like there's little they can do to prevent becoming the next victim of a layoff, but Chizen warned that some employers use layoffs as a way to enforce performance reviews.

"Employers can use layoffs as an opportunity to get rid of poor performers without spelling that out explicitly," Chizen said, adding that employers will look to hire strategically as the year progresses.

For those looking to avoid any severe consequences that could come with a layoff, Toni Frana, lead career expert at FlexJobs, recommends employees keep their resumes current and make a list of their top work achievements.

"With layoffs affecting various industries, now is more important than ever for workers to build their career resilience," Frana told Newsweek. "This will help you be prepared in the event of a sudden job change, like a reduction in the workforce or layoffs at your company."

You should also understand your daily budgeting and long-term financial needs in case of an unexpected job change, Frana said. Most finance experts recommend an emergency savings fund for at least six months.

And when it comes to your current work, if you have the option between choosing to work remotely or at home, in-office roles might have some perks.

"Show up to the office in person," business psychologist Roger Hall told Newsweek. "When choosing which employee to lay off, it is easier to lay off the person you don't see as much."