52,000 people! Major American companies are intensively laying off employees this week, aiming to reduce costs with AI

Several large companies in the United States announced large-scale layoff plans this week, totaling over 52,000 job cuts.

David Mericle, Chief U.S. Economist at Goldman Sachs, stated that companies are increasingly discussing layoffs and seem to be looking to leverage artificial intelligence to reduce labor costs.

Although this round of layoffs is concentrated in a few large companies, it has raised concerns among some Federal Reserve policymakers and private economists. The once-booming job market is weakening.

Data shows that only 50,000 jobs were added in the U.S. in December, and the median duration of unemployment rose to 11.4 weeks, the longest since 2021.

Companies Clearly Pointing to Cost Reduction and Efficiency Improvement

Companies such as Amazon, UPS, Dow Chemical, Nike, and Home Depot have disclosed layoff plans. Most companies stated that job cuts are aimed at making their organizations leaner and more efficient.

On Tuesday, UPS Chief Financial Officer Brian Dykes told analysts that the logistics company would offer buyout options to drivers and would lay off up to 30,000 people this year to "help us right-size," as the number of packages delivered for Amazon has decreased.

The next day, Amazon announced its second round of layoffs within three months, cutting 16,000 employees. Senior Vice President Beth Galetti wrote in an email to employees that this move aims to "eliminate bureaucracy."

Dow Chemical CEO Jim Fitterling stated on Thursday that the chemical company would advance a "comprehensive and thorough simplification of its operating model," cutting 4,500 employees.

Job Market Stagnation After Pandemic Expansion

Many companies rapidly expanded after the pandemic began in 2020, when online shopping thrived, and large-scale stimulus plans led to a significant rebound in hiring during the tumultuous period of the COVID crisis.

However, over the past year, the labor market has stagnated, with uncertainties in trade and artificial intelligence making employers reluctant to hire or lay off employees. Unemployment and unemployment benefit claims have risen, but both remain below pre-pandemic levels.

Federal Reserve officials stated on Wednesday that the unemployment rate in January fell from 4.5% in November to 4.4%, showing "some signs of stabilization." However, the slowdown in hiring has made the experience of unemployment more challenging, and signals of weakness in the job market are accumulating.

The U.S. economy added only 50,000 jobs in December. As hiring slows, the median duration of unemployment extended to 11.4 weeks last month, the longest since 2021.

Signs of Cooling in the Job Market

Indeed economist Aidala pointed out that while overall layoff data is not unusual, "unemployment (or merely the prospect of unemployment) is a more difficult experience for workers than what overall indicators show alone." In an environment of slowing hiring, reemployment becomes more challenging.

The labor market has been in a wait-and-see mode over the past year due to uncertainties in trade and AI, with employers reluctant to make large-scale hires or layoffs.

However, this week's intensive layoff announcements indicate that as pressure for AI investment increases, companies are breaking this balance and moving towards proactive cost-cutting Risk Warning and Disclaimer

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