According to a recent Reuters report, US companies have announced more than 25,000 job reductions this month, as businesses worldwide increase layoffs.
Prominent corporations, such as Amazon, Nestlé, and UPS, are curtailing expenditures amid declining consumer confidence, while AI-driven automation increasingly displaces workers across sectors.
According to a Reuters count, American corporations have announced over 25,000 job cuts this month, excluding UPS’s projection of 48,000 for early 2025. In Europe, the total exceeds 20,000, with Nestlé comprising the majority following last week’s elimination of 16,000 positions.
In the absence of comprehensive data on employment reductions stemming from the US government’s ongoing second-longest shutdown in history, investors are closely monitoring anecdotal accounts of layoffs. Even if year-end layoffs are prevalent, many notable reductions will be spread over a longer period.
Investors are contemplating the implications of this situation. What is the general situation, given that we are unable to observe it? Stated Adam Sarhan, Chief Executive Officer of 50 Park Investments in New York. The layoffs at Amazon indicate that the economy is deteriorating rather than improving. Mass layoffs do not occur during periods of economic strength.
Amazon announced it will eliminate up to 14,000 positions from its corporate workforce, aligning with Target, Procter & Gamble, and others in reducing thousands of office employees. On Monday, Reuters reported that up to 30,000 positions at Amazon may be terminated.
The rationale for the reductions is diverse. Companies such as Target and Nestle have newly appointed CEOs who are enthusiastic about reorganising their operations. Carter’s, a baby-apparel manufacturer, is eliminating 15% of its office positions due to significant import tariffs enacted by US President Donald Trump.
What is notable is the emphasis by corporations such as Amazon and Target on white-collar positions perceived as susceptible to AI-driven automation, rather than on retail or manufacturing roles. Certain observers suggest that Amazon’s action may signal preliminary signs of significant structural change as corporations strive to rationalise the substantial investments in AI technologies.
Target’s reductions impact 8% of its corporate personnel, but Amazon’s reductions touch only 14,000 roles within its workforce of 1.5 million.
KPMG’s recent study of US CEOs, published in September, indicates that anticipated AI investment has increased by 14% over the first quarter, reaching an average of $130 million for the upcoming year. 78% of executives report significant pressure from boards and investors to demonstrate that AI is reducing costs and enhancing earnings.
According to Bank of America experts, vocations most susceptible to impact are those where entry-level positions are supplanted by technology, as stated on October 22. Thus far, enterprises employing white-collar professionals, particularly in the information, banking, and professional services sectors, have experienced job growth alongside heightened AI utilisation, they noted.
Should layoffs intensify, they may further undermine consumer confidence and the overall US economy, which is already burdened by tariffs and inflation that exceed the Federal Reserve’s objectives. Federal officials apprehensive about the labour market fear that the “low-hiring, low-firing” climate may transition towards increased layoffs.
