US Job Cuts Surge to Highest Level Since Pandemic as AI Reshapes the Workforce

TLDR:

• Over 1.17 million US job cuts were announced in the past year, the highest total recorded since the COVID-19 pandemic era.
• The US government led all sectors with 317,000 cuts, followed by UPS at 78,000 and Amazon with 30,000 job reductions.
• Companies openly state that AI tools allow smaller teams to handle the same workload, replacing $150K–$200K salary roles.
• Analysts warn of a ghost economy where corporate output grows but household income and consumer participation steadily decline.

US job cuts have reached alarming levels not seen since the COVID-19 pandemic. Over 1.17 million job cuts were announced across the country in the past year.

Around 600,000 of those cuts came in the first two months of 2026 alone. Companies across multiple sectors openly cite artificial intelligence as a driving force.

This trend is unfolding against the weakest white-collar hiring market since 2008, raising concerns about broader economic stability.

Major Companies Lead a Wave of Workforce Reductions

The scale of recent layoffs spans both public and private sectors. The US government alone accounted for 317,000 cuts, the largest single contributor to the total. UPS followed with 78,000 job reductions, while Amazon announced cuts of 30,000 workers.

Other major corporations have also trimmed their workforces considerably. Intel cut 25,000 jobs, and Citigroup reduced staff by 20,000. Nissan matched that figure, while Microsoft announced 15,000 cuts.

Market analyst account Bull Theory posted about the situation on social media platform X. The post noted that Verizon cut 13,000 jobs, Accenture removed 11,000, and Salesforce and Block each reduced headcount by 4,000. The figures paint a broad picture of workforce contraction across industries.

Companies are now openly stating that smaller teams can perform the same volume of work. This shift reflects how AI tools are replacing roles previously held by high-earning professionals. The pattern suggests a structural change rather than a temporary economic adjustment.

The Ghost Economy Risk and Long-Term Consumer Demand

The concern goes beyond job numbers alone. Higher-income workers earning between $150,000 and $200,000 annually drive a large portion of US consumer spending. When software replaces those roles, corporate margins rise but household income falls.

There is also a secondary effect worth noting. The same companies cutting staff sell products and services to that same income group.

If AI-driven layoffs reduce household income at scale, demand across retail, fintech, travel, and enterprise services weakens over time.

Bull Theory’s post warned of what it called a “ghost economy,” where output grows but broad participation in that growth declines.

Short-term profitability may improve, yet the customer base supporting those profits gradually shrinks. This creates a tension between rising productivity and weakening consumer demand.

Housing, autos, travel, subscriptions, and credit quality all become sensitive under these conditions. The labor market must absorb this transition before demand weakens at the economic core.

Without that absorption, the gap between corporate earnings and household financial health will continue to widen.

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