Companies worldwide cut jobs due to poor confidence and artificial intelligence expansion

Wave of Layoffs Across Multiple Sectors

Global companies are accelerating job cuts across various industries, with prominent firms such as Amazon, Nestlé, and UPS announcing significant workforce reductions. This trend comes as economic sentiment remains weak and as firms look to automation and AI tools to drive efficiency and reduce costs[1]. According to data collected by Reuters, U.S.-based companies have revealed plans for over 25,000 layoffs this month, excluding UPS, which reported 48,000 job cuts since the beginning of 2025. In Europe, job cuts have topped 20,000, with Nestlé alone accounting for most of these through a 16,000-role reduction[1].

Motivations Behind Workforce Reductions

The motivations for these job cuts vary by company. In some cases, newly appointed CEOs—such as those at Target and Nestlé—are launching restructuring campaigns. For others, like Carter’s, external factors such as U.S. tariffs on imports have driven a 15% reduction in white-collar office roles. Across the board, there is a noticeable focus on eliminating corporate and administrative positions perceived as vulnerable to AI-driven automation[1].

• Amazon plans to cut up to 14,000 corporate jobs, with reports indicating that the figure could reach 30,000 in total.
• Target is reducing 8% of its corporate staff.
• Nestlé is slashing 16,000 positions in Europe as part of a major restructuring.
• Carter’s is cutting around 15% of its office workforce due to import tariffs.

AI Investments Under Scrutiny

Companies are under increasing pressure from boards and investors to deliver returns on substantial investments in AI solutions. KPMG’s latest survey of U.S. executives reports a 14% jump in projected AI spending since the start of the year, averaging $130 million per company in the next twelve months. A significant 78% of leaders say they must demonstrate that AI investments yield cost savings and increased profits[1].

Impact on the Labor Market

While headlines highlight corporate layoffs, economists caution against attributing all recent job losses to AI adoption. Allison Shrivastava, economist at Indeed Hiring Lab, notes that the tech sector’s pullback began after a 2022 peak and that AI’s impact on employment remains moderate for now. According to Bank of America economists, the jobs most exposed to automation are entry-level positions, but data shows that sectors rich in white-collar employment, such as information and finance, continue to grow even with increased AI utilization[1].

‘Low-Hiring, Low-Firing’ Phase and Economic Outlook

Reliable labor market data is scarce due to the ongoing U.S. government shutdown, though indicators so far do not reveal a surge in layoffs. ADP estimates a modest 14,250-job increase in early October. Experts describe the current climate as one of “low-hiring, low-firing,” where companies are quietly reducing headcount by not filling vacant positions. There is concern that if large-scale layoffs continue, they could further erode consumer confidence and strain the wider economy, which is already contending with persistent inflation and tariffs[1].

“The environment feels like ‘hold-your-breath’ mode,” says Shrivastava, emphasizing that organizations are pausing aggressive workforce changes as they wait to see how the economic and AI landscape evolves[1].

Reliable labor market data is scarce due to the ongoing U.S. government shutdown, though indicators so far do not reveal a surge in layoffs. ADP estimates a modest 14,250-job increase in early October. Experts describe the current climate as one of “low-hiring, low-firing,” where companies are quietly reducing headcount by not filling vacant positions. There is concern that if large-scale layoffs continue, they could further erode consumer confidence and strain the wider economy, which is already contending with persistent inflation and tariffs[1]. Reliable labor market data is scarce due to the ongoing U.S. government shutdown, though indicators so far do not reveal a surge in layoffs. ADP estimates a modest 14,250-job increase in early October. Experts describe the current climate as one of “low-hiring, low-firing,” where companies are quietly reducing headcount by not filling vacant positions. There is concern that if large-scale layoffs continue, they could further erode consumer confidence and strain the wider economy, which is already contending with persistent inflation and tariffs[1].