Companies around the world have recently stepped up job cuts to cut costs, including major corporations from Amazon to Nestlé to UPS, as consumer confidence darkens and AI-driven technology companies begin replacing jobs with automation.
According to a Reuters tally, American companies have announced more than 25,000 job cuts this month, not including 48,000 at UPS from the beginning of 2025.
In Europe, more than 20,000 layoffs have been recorded this month, with the Swiss group Nestlé accounting for the majority of this figure after announcing a cut of 16,000 jobs in mid-October.
With job loss numbers not available for the entire economy and the U.S. government in full shutdown, investors are paying close attention to these layoff announcements. This occurs even though year-end layoffs are common and most high-profile job cuts are spread over a long period of time.
A return on investment
Amazon announced Tuesday that it would cut 14,000 jobs in its office services, following the lead of Target, Procter & Gamble and other companies that have cut thousands of administrative positions.
The cuts at Target affect 8% of its administrative staff, while those at Amazon only affect 14,000 positions out of a total workforce of 1.5 million people.
Reuters reported on Monday that up to 30,000 jobs could be cut at Amazon. The reasons for these deletions vary. Some companies, such as Target and Nestlé, have new leaders eager to restructure their businesses.
What stands out, however, is that companies like Amazon and Target are focusing on white-collar positions considered vulnerable to AI-powered automation, rather than jobs in stores or factories.
Some analysts say Amazon’s move could be a harbinger of deeper structural changes as companies struggle to justify the billions spent on artificial intelligence tools.
KPMG’s latest survey of US executives, published in September, shows that planned investments in AI have increased 14% since the first quarter, reaching an average of $130 million (€111.47 million) over the next year.
Additionally, 78% of executives say they are under intense pressure from boards of directors and investors to demonstrate that AI saves money and increases profits.
According to Bank of America economists, the occupations most likely to be affected would be those where entry-level jobs may be replaced by automation, according to an Oct. 22 memo. However, so far, companies that employ white-collar workers, such as in the information, financial and professional services industries, have seen job growth alongside increased use of AI, they wrote.
“(AI) has the potential to have an impact on the labor market, but I don’t think that impact is very strong yet,” said Allison Shrivastava, an economist at Indeed Hiring Lab in Saratoga Springs, New York, noting that the tech sector has declined from the 2022 peak.
“Few hirings, few layoffs”
Given the US lockdown, data is limited. Weekly state unemployment statistics so far show no notable increase in layoffs, but job growth remains moderate.
Economists say the labor market is stuck in a “few employees, few layoffs” phase, in which companies quietly reduce their workforces by not replacing vacant positions.
If layoffs accelerate, they could further weaken consumer confidence and the US economy as a whole, already pressured by tariffs and inflation above the Federal Reserve’s (Fed) targets. Federal Reserve officials fear that the “low hiring, low hiring” environment could lead to an acceleration of layoffs.
“The phrase ‘low hires, low layoffs’ almost makes it seem like we’re in a new equilibrium, when in reality companies are holding their breath, trying to figure out what’s going on,” said Allison Shrivastava.
Source: BFM TV
