Should you be concerned about recent layoffs at major companies? Experts speculate

1:40 AM Amazon corporate office building in Sunnyvale, California, November 8, 2014. Lisa Werner/Moment Editorial/Getty Images

Mass layoffs at corporate giants such as Amazon, UPS and Verizon in recent weeks have drawn attention to a sluggish labor market and fueled fears that job losses could spread.

The high-profile cuts have coincided with persistent inflation and shaky economic performance, which threatens to worsen the fall in the cost of living if wages dry up.

However It’s probably too early to panic, some economists told ABC News. While the layoffs reflect a weakening labor market and the adoption of artificial intelligence in some corners of the tech industry, they added, the prospect of more job losses remains highly uncertain.

Thick fog is clouding the outlook due to a week’s delay in the government’s publication of monthly gold standard hiring data. A clearer picture will emerge on Thursday after the release of September jobs data, although the Trump administration has indicated that October numbers may never be released.

Currently, the unemployment rate remains at historically low levels and the economy has experienced only minor job losses, even if it appears that the years of continuous job gains have passed.

“The unemployment rate is very low — it’s hard to do much better,” Philip Kircher, a professor of industrial and labor relations at Cornell University, told ABC News. “It’s much harder to say how some of the current shortfalls will play out.”

Last month, Amazon announced plans to lay off about 14,000 corporate employees, saying the company is looking to cut red tape and invest in “our biggest bets,” such as artificial intelligence.

UPS sought to “create a more efficient operating model that would better respond to market dynamics,” the company said.

Verizon plans to cut 15,000 jobs in the coming days, marking the largest layoffs in the history of the telecommunications company, the Wall Street Journal reported this week.

A United Parcel Service driver loads packages in New Orleans, March 19, 2025. Jim West/UCG/Universal Images Group via Getty Images

Such layoffs can be devastating for the workers directly affected and are understandably a concern for workers across the economy, but the job cuts represent a small portion of the nation’s workforce, Corey Stahl, an economist at the Indeed Hiring Lab, told ABC News.

“We’re looking at tens of thousands of people being laid off as a large number,” Stahl said. “It’s important to understand that we’re talking about tens of thousands of workers out of an estimated 160 million people employed across the country.”

Jobs data for the month of August — the latest on record — found about 163 million people are now working in the U.S., the Bureau of Labor Statistics said.

The headlines of layoff announcements often overshadow hiring initiatives launched elsewhere around the same time, often offsetting the job losses, Ioana Marinescu, a professor of labor economics at the University of Pennsylvania, told ABC. News.

“You can’t look at multiple companies,” Marinescu said. “You have to look at the big picture and whether there are job losses.”

The U.S. economy posted more than 50 consecutive months of job gains, until June’s contraction. The country returned to employment growth in August, adding 22,000 jobs, a relatively small amount.

While economists played down worries about imminent far-reaching job losses, they acknowledged that the labor market slowdown has legitimate cause for concern.

The U.S. economy added 911,000 fewer jobs in the 12 months ending in March than previously expected, the BLS said in September, sharply revising the job total to the downside. The figure, which exceeded economists’ expectations, turned out to be the largest revision in history.

“The layoffs are a reflection of the fact that this is a labor market slowdown,” Stahl said. “These companies are saying, ‘Hey, maybe we need to cut some jobs.’ There are clear reasons why job seekers should be concerned about this.”

Several companies are announcing layoffs, with tech firms citing AI as a reason for job cuts. While AI-related job losses remain limited, management decisions raise concerns about the future impact of AI’s wider adoption, some economists say.

“We haven’t seen it at scale yet, but it’s something I’ll be watching over the next year or so,” Marinescu said.

Jobs data due on Thursday could provide a clue as to whether the high-profile layoffs are a flash or a bellwether, economists said.

“I’m waiting to get a clearer picture of which industries are losing jobs — or not,” Marinescu said.

Source: abcnews.go.com