Will There Be Layoffs in 2026? What the Data Predicts

As 2025 draws to a close with over 110,000 tech workers laid off plus tens of thousands more across other sectors, a critical question looms for 2026: Will the layoffs continue, accelerate, or finally ease? Using data from 2025's layoff trends, economic forecasts, earnings reports, and executive statements, this analysis predicts what's ahead for the labor market, and which companies and industries face the highest risk.

If you're worried about job security in 2026, planning your career moves, or simply trying to understand where the economy is headed, this data-driven analysis breaks down the key indicators, recession probability, and specific warning signs to watch.

The 2025 Baseline: What Just Happened

To predict 2026, we first need to understand 2025's layoff landscape. The numbers tell a sobering story:

• 110,000-180,000+ tech layoffs across the sector (our data tracks approximately 140,000, consistent with Layoffs.fyi's count of 112,822 at 231 companies and TrueUp.io's broader count of 182,963 across 626 companies)
• 48,000+ jobs cut at UPS alone (the year's largest single restructuring)
• 20,000-25,000 semiconductor jobs at Intel (15,000 cut in August 2024 under previous CEO, plus ~20,500 by September 2025 under new leadership toward 75,000 core employee target)
• 14,000 corporate jobs at Amazon as part of AI-driven restructuring
• 10,000 jobs at Oracle as part of restructuring

For context, 2025's tech layoffs remain roughly consistent with 2024's pace (our data shows approximately 140,000-145,000, aligning closely with Layoffs.fyi's documented 150,000-152,000 for 2024). Rather than a dramatic acceleration, 2025 represents a continuation of the workforce optimization that began in 2023. This dramatic acceleration wasn't driven by a single economic shock, but rather by overlapping structural forces: automation, AI integration, post-pandemic normalization, and strategic business model shifts.

Industries Hit Hardest in 2025

The data reveals clear winners and losers by sector:

1. Logistics & Freight: 48,000+ jobs (UPS's automation push)
2. Semiconductors: 20,000-25,000 jobs (Intel's multi-phase restructuring)
3. Internet Retail: 14,000 jobs (Amazon's AI restructuring)
4. Telecom: 13,000-15,000 jobs (Verizon's efficiency drive)
5. Software Infrastructure: 10,000+ jobs (Oracle restructuring)

Notably, these aren't struggling industries, many companies posting record profits still cut staff. Intel eliminated positions despite billions in government subsidies. Amazon eliminated 14,000 corporate roles while expanding its AI capabilities. This pattern suggests 2025's layoffs were about transformation, not survival.

Economic Forecasts: What Economists Predict for 2026

Multiple major forecasting institutions paint a consistent picture of economic deceleration in 2026:

GDP Growth Projections

• OECD: 1.5% U.S. GDP growth in 2026 (down from 1.6% in 2025)
• IMF: 2.0% U.S. GDP growth in 2026
• Fannie Mae: 2.3% GDP growth in 2026
• World Bank: Global growth of 2.3% (slowest since 2008 outside recessions)

These sub-2.5% growth rates historically correlate with tight labor markets and increased layoff risk. For comparison, the U.S. averaged 3-4% GDP growth during periods of robust job creation.

Unemployment Rate Forecast

The OECD forecasts unemployment at 4.4% by early 2026, while the American Bankers Association's Economic Advisory Committee projects a slightly higher peak of 4.6%, up from current levels around 4.1%. That half-percentage-point increase translates to roughly 800,000 additional unemployed workers.

These forecasts suggest modest labor market softening, driven by reduced household consumption and business investment amid policy uncertainty.

Recession Probability

While no major forecaster is predicting an outright recession in 2026, the risk remains elevated. Economic indicators suggest approximately a 30-35% probability of recession in 2026, with key risk factors including:

• Persistent inflation above the Federal Reserve's 2% target (projected at 2.7-2.8%)
• Trade tensions and elevated tariffs disrupting supply chains
• Policy uncertainty affecting business investment decisions
• Consumer spending constraints from high interest rates

Even without a formal recession, this "slowcession," slow growth without technical recession, creates conditions ripe for continued layoffs as companies preemptively cut costs.

The Layoff Drivers: Why 2026 Could See More Cuts

1. Automation Reaches Critical Mass

The primary driver of 2025 layoffs, automation, shows no signs of slowing. If anything, it's accelerating:

• UPS explicitly stated its 48,000 layoffs were primarily due to "increased use of technology," not tariffs or demand
• Amazon's 14,000 cuts were labeled "AI-driven restructuring" focused on eliminating management layers
• Oracle's $1.6 billion restructuring emphasized AI integration and operational efficiency

Companies that invested in AI and automation in 2024-2025 will see those systems reach production readiness in 2026, enabling further workforce reductions. Gartner predicts that AI will displace 30% of corporate functions by 2026, with administrative, customer service, and data entry roles most vulnerable.

2. The "Efficiency Era" Continues

Post-pandemic, companies shifted from growth-at-all-costs to profitability and efficiency. This cultural change persists:

• Tech companies over-hired in 2020-2022 and are still right-sizing their workforces
• Manufacturing is consolidating production to fewer, more automated facilities
• Logistics companies like UPS are closing redundant locations (93 facilities in UPS's case)

Executive language around "doing more with less," "organizational efficiency," and "removing layers" signals that this mindset will dominate 2026 planning cycles.

3. Interest Rates Remain Elevated

Despite expectations of Federal Reserve rate cuts, borrowing costs will remain historically high throughout 2026. This affects layoffs in two ways:

• High-growth companies that relied on cheap capital to fund expansion must now demonstrate profitability, often through workforce reductions
• Consumer spending slows as mortgage rates, car loans, and credit cards remain expensive, reducing demand and forcing companies to cut staff

The ABA committee expects inflation to remain above target at 2.8% in 2026, limiting how aggressively the Fed can cut rates. This "higher for longer" environment pressures corporate margins, making layoffs an attractive cost-cutting lever.

4. Trade Tensions and Tariff Uncertainty

While tariffs weren't the primary cause of 2025 layoffs (UPS explicitly clarified this), they create secondary effects that increase layoff risk:

• Manufacturing input costs rise as tariffs make raw materials more expensive
• Export-dependent sectors face retaliation tariffs from trading partners
• Supply chain disruptions force companies to maintain excess inventory, tying up capital

The OECD attributes 0.3 percentage points of GDP growth reduction to trade barriers and policy uncertainty, not catastrophic, but enough to tip marginal hiring/firing decisions toward layoffs.

Industries at Highest Risk in 2026

Based on 2025 trends, economic forecasts, and structural vulnerabilities, these industries face elevated layoff risk in 2026:

1. Technology (Continued Consolidation)

Risk Level: High

Despite already cutting deep in 2025, tech hasn't finished restructuring:

• Cloud infrastructure is commoditizing, pressuring margins at AWS, Azure, and Google Cloud
• SaaS companies face intense competition and customer spending scrutiny
• Cybersecurity consolidation continues as larger players acquire and integrate smaller firms
• Fintech companies struggle with reduced venture funding and path to profitability

Companies to Watch: Mid-tier SaaS providers, unprofitable tech unicorns, legacy IT services firms facing cloud competition

2. Retail & E-commerce (Automation + Weak Consumer Spending)

Risk Level: High

Retail faces a double threat: automation eliminating warehouse/fulfillment jobs, and weakening consumer spending reducing overall demand:

• Amazon's automation of fulfillment centers will accelerate, reducing warehouse headcount
• Traditional retailers continue closing underperforming stores
• E-commerce logistics providers see volume declines as growth normalizes

Companies to Watch: Regional retail chains, e-commerce logistics providers, fulfillment center operators

3. Manufacturing (Tariffs + Automation)

Risk Level: Moderate to High

Manufacturing's vulnerability depends heavily on tariff policy, but automation pressures are universal:

• Auto manufacturers transition to EVs, which require 30-40% less labor to assemble
• Consumer goods face margin pressure from tariffs on imported components
• Electronics assembly continues moving toward fully automated production lines

Companies to Watch: Auto parts suppliers, consumer electronics manufacturers, textiles/apparel companies

4. Financial Services (Fintech Disruption + AI)

Risk Level: Moderate

Banks and financial institutions are quietly automating back-office functions:

• Branch closures accelerate as mobile banking adoption reaches saturation
• Loan processing increasingly handled by AI systems
• Fraud detection and compliance teams replaced by machine learning models
• Call centers automated through advanced chatbots and voice AI

Companies to Watch: Regional banks, mortgage servicers, payment processors, insurance underwriters

5. Telecommunications (5G Investment Completion)

Risk Level: Moderate

Verizon's 15,000 layoffs in 2025 may preview sector-wide cuts:

• Network buildout complete for 5G, reducing need for installation crews
• Customer service automation through AI chatbots and self-service apps
• Store consolidation as phone purchasing moves online

Companies to Watch: Regional telecom providers, cable companies, wireless carriers

Companies Showing Warning Signs

While predicting specific company layoffs is challenging, certain indicators signal elevated risk. Watch for companies exhibiting multiple warning signs:

Red Flags to Monitor:

1. Hiring freezes announced (often precede layoffs by 3-6 months)
2. Executive departures (C-suite turnover often accompanies restructuring)
3. Earnings guidance cuts (signals revenue/margin pressure)
4. Office consolidations (real estate reduction typically includes staff cuts)
5. Vendor/contractor eliminations (companies cut contractors before full-time employees)
6. "Strategic review" or "operational efficiency" announcements (corporate euphemisms for layoffs)
7. Declining revenue per employee (indicates overstaffing relative to output)
8. Rising debt levels without revenue growth (forces cost-cutting to service debt)

Sectors with Highest Number of Warning Signs:

• Software-as-a-Service (SaaS): Multiple companies showing hiring freezes, margin pressure
• Legacy media and entertainment: Streaming wars consolidation forcing staff reductions
• Commercial real estate services: Work-from-home's continued impact reducing demand
• Education technology: Post-pandemic normalization as schools return to traditional methods

Economic Indicators to Watch in 2026

For workers and investors trying to anticipate layoff waves, monitor these leading indicators:

1. Initial Jobless Claims (Weekly)

What it measures: Number of people filing for unemployment benefits for the first time

Why it matters: Spikes in jobless claims appear 1-2 weeks before mass layoff announcements hit the news. A sustained rise above 250,000 weekly claims signals deteriorating labor market conditions.

Where to track: U.S. Department of Labor releases data every Thursday at 8:30 AM ET

2. ISM Manufacturing Index (Monthly)

What it measures: Survey of purchasing managers about production, new orders, employment

Why it matters: Readings below 50 indicate manufacturing contraction, which historically precedes layoffs by 2-3 months. The employment sub-index is particularly predictive.

Where to track: Institute for Supply Management releases data on first business day of each month

3. Corporate Earnings Calls (Quarterly)

What it measures: Management commentary on business outlook and cost management

Why it matters: Listen for phrases like "workforce optimization," "right-sizing," "strategic review," or "organizational efficiency", these euphemisms often precede layoff announcements within 30-90 days.

Where to track: Earnings call transcripts available on company investor relations pages and financial news sites

4. Consumer Confidence Index (Monthly)

What it measures: Consumer expectations about employment, income, and spending

Why it matters: When consumers expect job losses, they pull back spending, creating a self-fulfilling prophecy. Falling confidence (especially the "expectations" component) leads layoffs by 3-6 months.

Where to track: Conference Board releases data last Tuesday of each month

5. Yield Curve Inversion (Daily)

What it measures: Difference between 10-year and 2-year Treasury bond yields

Why it matters: When short-term rates exceed long-term rates (inversion), recessions follow within 6-18 months. While the curve normalized in late 2024, watch for re-inversion as a recession warning sign.

Where to track: Federal Reserve Economic Data (FRED) provides daily updates

What Workers Should Do Now: Preparing for Potential Layoffs

Whether or not 2026 brings widespread layoffs, preparation costs nothing and provides peace of mind:

1. Build Your Financial Cushion

• Target 6-12 months of expenses in emergency savings (lean toward 12 months in high-risk industries)
• Pay down high-interest debt to reduce fixed monthly obligations
• Review your severance potential (calculate weeks of pay per year of service based on company policy)
• Understand unemployment benefits in your state (typically 26 weeks at 40-50% of salary)

2. Strengthen Your Professional Position

• Update LinkedIn and professional networks (recruiters search most actively in January-February)
• Document your accomplishments with metrics (revenue generated, costs saved, projects completed)
• Cultivate relationships with recruiters in your industry before you need them
• Obtain certifications or training in high-demand skills (AI/ML, cloud platforms, data analytics)

3. Diversify Your Income

• Develop freelance/consulting capabilities to generate income during job searches
• Build passive income streams (rental property, investments, side businesses)
• Test the market by casually interviewing even if you're not actively looking

4. Read the Signals at Your Company

• Hiring freezes, travel restrictions, or budget cuts typically precede layoffs by 60-90 days
• Executive departures or restructuring announcements often signal coming workforce reductions
• Declining stock price or missed earnings increase pressure for cost cuts
• New senior leadership frequently brings restructuring within 6 months of arrival

5. Know Your Rights

• WARN Act requires 60 days' notice for mass layoffs (50+ employees at one location)
• Severance is negotiable (especially for longer-tenured or senior employees)
• COBRA healthcare allows continuing coverage for 18 months (though you pay full premium)
• Unemployment eligibility (immediate for layoffs, potential waiting period for resignation)

Industries with Growth Potential in 2026

Not all sectors face layoff risk. These industries show resilience or growth potential:

1. Healthcare (Demographic Demand)

Aging Baby Boomers create structural demand for healthcare services that transcends economic cycles. Expect continued hiring of nurses, home health aides, medical technicians, and healthcare administrators.

2. Clean Energy & Infrastructure (Government Spending)

Infrastructure Investment and Jobs Act funding continues through 2026, supporting jobs in construction, engineering, renewable energy installation, and grid modernization.

3. AI/ML Engineering (Technology Enabler)

While tech broadly faces layoffs, specialized AI/ML roles remain in demand as companies that laid off general software engineers hire AI specialists to build automation systems.

4. Defense & Aerospace (Geopolitical Tensions)

Elevated global security concerns drive defense spending, supporting aerospace manufacturing, cybersecurity, and defense contractor hiring.

5. Skilled Trades (Shortage Persists)

Electricians, plumbers, HVAC technicians, and construction workers remain in chronic shortage. These recession-resistant roles see steady demand regardless of broader economic conditions.

The Bottom Line: What to Expect in 2026

Based on comprehensive analysis of 2025 trends, economic forecasts, and structural market forces, here's the most likely 2026 scenario:

Base Case Prediction (60% Probability):

• Continued but moderate layoffs (110,000-180,000 tech sector range, consistent with 2024-2025 levels)
• Automation-driven cuts dominate (rather than economic crisis layoffs)
• No broad recession, but slow growth creates selective pressure
• Tech, retail, and manufacturing see the most cuts
• Unemployment peaks at 4.5-4.7% by mid-2026

Optimistic Case (25% Probability):

• Layoffs taper significantly (under 100,000)
• GDP growth exceeds forecasts (2.5%+ driven by productivity gains)
• Federal Reserve rate cuts boost consumer spending and business investment
• Companies finish restructuring and resume modest hiring

Pessimistic Case (15% Probability):

• Recession triggers broader layoffs (300,000+)
• Trade war escalation damages manufacturing and supply chains
• Consumer spending collapse forces emergency cost-cutting
• Unemployment rises above 5% by late 2026

Key Tipping Points:

Which scenario materializes depends on a few critical variables:

• Trade policy: Escalation or de-escalation of tariffs and trade tensions
• Federal Reserve: Timing and magnitude of interest rate cuts
• Consumer spending: Whether wage growth sustains household budgets amid inflation
• Corporate earnings: If profit margins hold or compress under cost pressures

Final Thoughts: Navigating Uncertainty

The data suggests 2026 will not bring mass unemployment or economic crisis, but neither will it return to the hiring exuberance of 2021-2022. Instead, expect a "new normal" of cautious corporate behavior: companies investing in automation, eliminating organizational layers, and requiring fewer workers to generate the same output.

For workers, this means:

• Job security has fundamentally changed, even profitable companies with strong balance sheets will continue workforce optimization
• Skills matter more than tenure, workers who can operate alongside AI and automation systems have better protection than those in easily automated roles
• Mobility is essential, the days of 30-year careers at single companies continue to fade; cultivate transferable skills and professional networks
• Preparation beats prediction, you can't perfectly forecast layoffs, but you can build financial resilience and professional options

Monitor the indicators outlined above, stay informed about your industry's trends, and maintain both financial prudence and professional development. Whether 2026 brings 100,000 or 300,000 layoffs, those who prepare will navigate the uncertainty far better than those who hope for the best.

Stay updated on real-time layoff data and analysis by visiting our layoffs tracker. For industry-specific guidance and career strategies, explore our blog for the latest analysis.

Data Note: Our layoff tracking shows approximately 140,000-145,000 tech sector layoffs in 2025, corroborating data from other leading trackers: Layoffs.fyi (112,822 tech workers at 231 companies), TrueUp.io (182,963 across 626 tech companies), and Crunchbase (118,099 US tech workers). Variation across sources reflects different methodologies for counting and categorizing layoffs. Our data falls in the middle of this range, focusing on verified major layoffs. Total cross-sector layoffs including logistics, telecom, and other industries significantly exceed these tech-focused figures. For 2024 baseline comparison, our data aligns with the industry consensus of approximately 150,000-152,000 tech layoffs.