Job cuts jumped over 100% month-over-month in January 2024, according to a study from Challenger, Gray & Christmas. Despite this alarming figure, this number is not as high as compared to January 2023. Will this set precedence for the months to come?

Challenger, Gray & Christmas Senior Vice President Andy Challenger joins Yahoo Finance Live to discuss the recent wave of job cuts and what role AI might have to play in this.

Challenger notes that the “splash” of job cuts in January was unexpected and could be a “sign of turmoil in the labor market.”

Challenger saw “about 381 jobs” that were cut either due to the pivot to AI or dissolving of roles that could be done by AI.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Video Transcript

JOSH LIPTON: Job cuts jumped more than 100% in January from the prior month. That's according to a new report out from Challenger Gray Christmas. Through a drastic-- though, a drastic jump, this year's cuts are lower than the same time last year. Joining us now is Andy Challenger, Challenger Gray Christmas Senior Vice President.

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Andy, it is good to see you. So I feel like, Andy, we almost get this steady drumbeat at this point of corporate announcements, of layoffs. It feels almost kind of daily at this point, Andy. Is that seasonality or no, something more serious?

ANDY CHALLENGER: You know, January is a month where we typically see a lot of layoffs in the economy. It's one of the times of year where there's a lot of turnover. Yet this splash-- a wave of layoffs that happened this year really took us by surprise. The fourth quarter had gotten quieter and quieter. We were expecting this gently cooling labor market that we'd been watching for over a year. And to see it spike back up 136% in January from December was really a shock to us and a sign that there really might be more turmoil to come in the labor market before this is all over.

JULIE HYMAN: Yeah. I mean, just today, we got more news on layoffs from Zoom and Okta, I believe, were the names today announcing some job cuts. Andy, I thought it was interesting. You guys in your data looked at how many of these cuts could be attributed to AI, because these companies are maybe putting resources elsewhere. So talk us through that number.

ANDY CHALLENGER: Yeah. We tracked a small number this month, about 381 jobs that were either cut because companies are moving to artificial intelligence instead of human workers for specific jobs, or they're closing departments to pivot their organization towards AI because it's a big potential for their organization.