MW Why companies like Amazon, UPS are getting bolder about layoffs after months of watching and waiting

By Bill Peters

'No-hire, no-fire' job market could give way to more direct action, as Amazon, UPS, Target and others cut jobs

Amazon on Tuesday said it would cut around 14,000 corporate jobs.

Analysts have called it the "no-hire, no-fire" economy. But the thousands of job cuts announced by Amazon.com Inc. and United Parcel Service Inc. on Tuesday may suggest that the U.S. job market's current state of suspension has changed for the worse.

The exact meaning of those cuts, and others in recent weeks, are being debated by economists and others. Either way, while profit margins across the S&P 500 have remained strong, the cuts have followed months of slower hiring, as some companies hold off on big decisions and wait for the dust to settle on tariff negotiations, the government shutdown, consumers' efforts to tame higher costs of living, and the state of artificial intelligence.

John Challenger, chief executive of career-services firm Challenger, Gray & Christmas, said the size of the cuts from Amazon (AMZN) and UPS (UPS), along with others - like those announced by Paramount Skydance Corp. (PSKY) and Target Corp. (TGT) over the past week - signaled a "significant" shift in how companies were thinking about the way they operate.

"We've been kind of in 'no-hire, no-fire.' To some degree that's been the definition of what's been going in the labor market recently," he said. "But this would seem to suggest that kind of stasis is now changing to more direct action on the part of companies, and that's going to make jobs more precarious."

"Sometimes companies start to do these together, so they don't stand out as the only one making big cuts," he added. "So we may see others join the fray."

Peter Cohan, a professor of management practice at Babson College, said the cuts from Amazon and Target were a sign of weaker demand up ahead.

"These industries are telling us they anticipate less consumer spending during the holiday season," he said. "These retailers cater to middle-class consumers who are suffering economically due to wage increases that trail the inflation rate, exacerbated by tariffs and corporate layoffs."

Amazon - whose chief executive in June said AI would shrink its corporate workforce in the years ahead - on Tuesday said it would be eliminating around 14,000 jobs from its corporate ranks, following reports a day earlier that it could cut up to 30,000 jobs. The online retailer on Tuesday said it would give most employees affected 90 days to look for a new job at the company.

Beth Galetti, senior vice president of people experience and technology at Amazon, noted that the company was cutting jobs as it was doing well.

"What we need to remember is that the world is changing quickly," she said in a message to employees. "This generation of AI is the most transformative technology we've seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones)."

The impact of AI could be felt elsewhere a day earlier - at education platform Chegg Inc. (CHGG), where executives there said they would cut 45% of its workforce, citing the "new realities of AI."

Meanwhile, UPS on Tuesday said that through September, it had cut its workforce by 34,000 employees. In the spring, the package-delivery giant had said it would cut 20,000 jobs. However, shares rallied on Tuesday, on investors' hopes the cuts would pad the bottom line of a company that has struggled with subdued shipping demand over the past few years.

Through September - the latest month that data was available - companies have announced 946,426 job cuts this year, according to data from Challenger, Gray & Christmas. That's the highest year-to-date number since 2020, when more than 2 million job cuts were announced, and up 55% from the first three quarters of last year, the firm said.

The year-to-date total is the fifth highest in the 36 years that Challenger has been tracking it. So far this year, employers have planned to add 204,939 jobs, a 58% drop from the first nine months of last year, due largely to a low number of seasonal hiring announcements, the firm said.

ADP has said that private employers eliminated jobs in September for the third time in four months. On Tuesday, the company said preliminary estimates called for an average increase of 14,250 jobs for the four-week period that ended on Oct. 11.

Still, Martha Gimbel, executive director at the Budget Lab at Yale and a former senior advisor at the White House Council of Economic Advisers, said that as of August at least, the rate of layoffs had been a bit lower than it was in the late 2010s. And the recent spate of cuts, she said, told her "very little" about the current state of the economy.

"I was worried about the economy yesterday, and I was worried about how we will handle technological change yesterday," Gimbel said. "These announcements do not change my level of stress about either of those things."

She noted that while headline figures can spook the public, the U.S. labor market generally has had a lot of churn. Staff might laid off solely for company-specific reasons, and those companies might still be hiring in different departments. And as the government shutdown starves the markets of official data, any individual announcement from a company can take on more meaning.

"Without that government data, we are likely to over-interpret these types of private-sector announcements," she said.

Audrey Guo, an economics professor at Santa Clara University, said other factors - like the coming holidays, and the beginning of open enrollment for health insurance - could be affecting companies' decisions. But she said the recent cuts weren't an obvious sign of a slowdown.

"Large employers frequently make adjustments to their workforce that aren't directly related to economic conditions, so I wouldn't say this is a definite sign of a weakening job market," she said.

Elsewhere, Paramount Skydance, in the wake of a turbulent merger process, plans to lay off some 1,000 employees this week, with more likely on the way, according to reports on Monday. Molson Coors Beverage Co. $(TAP)$, General Motors Co. $(GM)$ and Meta Platforms Inc. (META) are also reportedly trimming staff.

And according to reports last week, Target said it would cut corporate jobs by 8%, amid a broader effort to revive sales growth and retrain its focus on its sense of style and design.

Jason Schloetzer, a business professor at Georgetown University, told MarketWatch last week that Target was likely looking for "quick wins" to buy time, as investors wait for the retailer's turnaround plans to generate profit. Wall Street analysts still expected worse things ahead for the big-box chain.

The job cuts have been announced as the third-quarter earnings season gets busier. FactSet Senior Earnings Analyst John Butters, in a report last week, said third-quarter results so far showed net profit margins for S&P 500 companies overall were trending at 12.8%, putting the figure above five-year averages for the sixth consecutive quarter.

But Cohan said that since 70% of economic growth comes from consumer spending, "we could be in a doom loop where companies lay off more workers to meet quarterly earnings targets."

"The newly unemployed workers spend less, leading to lower retail revenue and more layoffs," he said.

-Bill Peters

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October 28, 2025 17:51 ET (21:51 GMT)

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