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US job cuts could hit 1.6 million: Recession next?

By · Published by Everything Blog

In short

Spreading corporate reductions across retail, finance, and technology could push unemployment near typical economic contraction levels. Heavy investments in artificial intelligence and automation are increasingly prompting firms to slash headcounts, putting hundreds of thousands of non-tech positions at risk. However, Bureau of Labor Statistics figures show cumulative discharges through August 2026 actually dropped 2.3% compared to the prior year.

Key points

  • Artificial intelligence productivity gains and costly data center expenditures are drivin…: Artificial intelligence productivity gains and costly data center expenditures are driving significant corporate workforce reductions.
  • Risk of heavy job loss is expanding beyond tech firms directly into financial services an…: Risk of heavy job loss is expanding beyond tech firms directly into financial services and retail sectors.
  • National discharge rates remain steady at 1%, indicating that wider economic contraction…: National discharge rates remain steady at 1%, indicating that wider economic contraction thresholds have not yet been reached.

Sources checked by our analysis pipeline: 1

The potential impact could extend well beyond technology. An analysis by 24/7 Wall St. warned that layoffs spreading into retail and financial services could result in another 1.6 million job losses, pushing US unemployment closer to levels associated with a recession.

The warning comes as government data shows that millions of Americans have already experienced layoffs or employment discharges this year. However, the latest figures do not yet point to an increase in the overall layoff rate.

Google joins Microsoft and Oracle as Big Tech layoffs rises

Google has started offering employees voluntary exit packages, according to a Reuters. The move puts the company alongside Microsoft, Oracle and Meta, which have also undertaken workforce reductions or offered buyouts.Microsoft recently offered buyouts to 60,000 employees, although it remains unclear what the company will do if fewer workers accept. Oracle has cut 21,000 positions, representing approximately 13% of its workforce.

Meta CEO Mark Zuckerberg had earlier planned to eliminate 45,000 jobs, equivalent to around 60% of the company's employees, but subsequently scaled back the plan.

The reasons behind the cuts vary. While…

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