U.S. Layoffs Surge despite Strong Jobs Data as Major Corporations Make Cuts

While the U.S. government winds down its Department of Government Efficiency initiative, which led to thousands of federal job cuts, layoffs are still hitting corporate America. Indeed, companies are under growing pressure to cut costs due to economic uncertainty, fueled in part by President Trump’s tariff policies. Unsurprisingly, many firms have raised their prices, but layoffs are also being used to manage expenses. Although April’s jobs report exceeded expectations, ADP data showed that private-sector hiring recently dropped to a two-year low, which created new worries about the U.S. economy and labor market.

Interestingly, artificial intelligence is playing a bigger role in why some companies are reducing staff. While many firms give broad reasons like cost-cutting or restructuring, some tech leaders are now openly mentioning AI’s impact. In fact, Klarna CEO Sebastian Siemiatkowski told CNBC that the company shrank its workforce by 40%, partly because of AI investments. Separately, Shopify (SHOP) CEO Tobias Lütke recently told employees that they must prove why a task can’t be done by AI before requesting more staff or resources. As a result, more companies are turning to automation in order to reshape their operations.

This has led to several major companies announcing layoffs in recent weeks. To begin with, Procter & Gamble (PG) will cut 7,000 jobs, or about 15% of its non-manufacturing staff. At the same time, Microsoft (MSFT) is eliminating 6,000 roles, while Citigroup (C) is cutting 3,500 jobs in China’s IT services unit. In addition, Walmart (WMT) plans to lay off 1,500 employees across its technology, operations, e-commerce, and advertising units. Other cuts include CrowdStrike’s (CRWD) 500 job cuts, Disney’s (DIS) layoffs across film and TV divisions, and Amazon’s (AMZN) 100 cuts in its devices unit.

Which Stock Is the Better Buy?

Turning to Wall Street, out of the stocks mentioned above, analysts think that AMZN stock has the most room to run. In fact, AMZN’s average price target of $241.64 per share implies 13.6% upside potential. On the other hand, analysts expect the least from SHOP stock, as its average price target of $110.78 equates to a gain of 2.4%.

See more AMZN stock analyst ratings