News reports predict that multiple large U.S. corporations across several industries will eliminate hundreds, if not thousands, of jobs in January. In fact, experts predict early 2026 will mirror late‑2025’s elevated layoffs—driven by high borrowing costs, tariffs, spending cuts, and AI restructuring—resulting in a weaker, slower labor market rather than a sudden collapse.
Hence, consensus forecasts project U.S. unemployment around 4.4–4.5% in 2026, implying weaker labor markets but not a 2008‑style crash.
The sectors most at risk are technology, manufacturing, construction, retail, some government roles, and consumer‑facing services vulnerable to weaker spending or immigration policy changes; routine or pandemic‑overstaffed positions and jobs easily augmented by AI.
“As we move into 2026, workers are bracing for continued instability,” says Jasmine Escalera, Zety’s career expert. “They are entering the new year not with confidence but with caution, anxiety and a heightened sense of uncertainty about their careers.”
“It’s no wonder employees heading into 2026 are emotionally drained and stressed.”
Key Drivers Behind Layoffs
Economists highlight three main forces driving this situation:
1) high borrowing costs from still‑restrictive monetary policy
2) Trump‑era tariffs and reduced public spending (especially in health care), and
3) AI‑driven restructuring, particularly in tech and white‑collar work.
American corporate executives note that tariffs negatively impact manufacturers, leading to hiring freezes or job cuts due to rising costs and policy uncertainty.
Adam Fazackerley, COO and co-founder of Lay-n-Go, and U.S. Chamber Small Business Council member, stated that tariffs significantly increase costs for small businesses, making a container of his product cost $100,000 more, which he believes “crushes us.”
It’s not surprising that layoffs are described as part of a “low‑hire, low‑fire” or “no‑hire, no‑fire” environment, shifting toward more frequent job cuts as growth cools and corporate earnings become less certain.
2026 Consensus Prediction
Outplacement data show 2025 job cuts up about 54 percent year‑over‑year, with experts warning that “every sector faces the possibility of layoffs in 2026” as unemployment edges higher and job growth slows.
But, the situation is not entirely dire. Yes, forecasters expect a grinding, uneven weakening—continued rounds of layoffs and slow hiring well into 2026. But workers will be able to diversify income where feasible. Furthermore, the health care industry will remain robust, so it’ll be wise for laid-off employees to target that arena when looking for work. Keep in mind, not all health care is medical, as places like hospitals, nursing homes, and assisted living communities also need secretaries and IT and marketing professionals.
The most important prediction aspect is that layoffs are expected to be persistent and sector‑specific, so workers should upskill (notably in AI), diversify income, and seek roles in more resilient industries to weather prolonged disruption.
Update: WARNING: January layoffs were the highest since 2009
