What it means for cryptocurrencies

This week, several major U.S. companies across multiple sectors, including Amazon and Pinterest, announced job cuts.

The move follows a year of deep job cuts in which U.S. employers cut about 1.2 million positions. Notably, labor market signals are amplifying concerns about a potential recession.

Major US companies announce layoffs in January 2026

On Wednesday, e-commerce giant Amazon cut about 16,000 corporate roles. This follows the reduction of approximately 14,000 positions in October.

Beth Galetti, Amazon’s senior vice president of people experience and technology, said in a blog post that the layoffs are part of the company’s ongoing efforts to “strengthen our organization by reducing hierarchy, increasing ownership, and eliminating bureaucracy.” The job cuts come as Amazon continues to increase investment in its artificial intelligence efforts.

Pinterest announced on January 27 that it will cut its workforce by less than 15% and reduce its office space. The company said the reorganization is aimed at supporting its AI-related priorities. The process is expected to be completed by September 30, according to a regulatory filing.

Meanwhile, United Parcel Service said it plans to cut up to 30,000 operational roles this year. Nike is also cutting back on its workforce.

CNBC reported that the company will lay off 775 employees in an effort to improve profitability and expand its use of automation technology. These are just some of the many companies that have announced layoffs in 2026.

Increased layoffs and worsening employment outlook raise concerns about US recession

Announcements of layoffs are relatively common during the first quarter as companies reassess their budgets and staffing needs following year-end financial results. Nevertheless, the trend is even more worrying when compared to the previous year’s pattern.

According to Global Markets Investor, U.S. layoffs will surge in 2025, increasing 58% from the previous year. This increase brings total job losses to the highest level since the pandemic era in 2020.

Excluding the extraordinary circumstances of 2020, the scale of layoffs makes 2025 the toughest year of layoffs since the 2008 financial crisis.

“Historically, such large-scale layoff announcements have only appeared during recessions, such as 2001, 2008, 2009, and 2020, and post-recession years in 2002 and 2003,” Global Markets Investors wrote.

Prolonged job searches further exacerbate concerns. Currently, unemployed Americans are taking an average of about 11 weeks to find a new job, the longest period since 2021.

Furthermore, the probability of finding a job fell by 4.2% year-on-year to a new low of 43.1% in December 2025. These labor market signals have raised concerns among analysts about an economic recession.

“The U.S. has lost an average of 22,000 jobs per month over the past three months, and this is the third consecutive month the three-month moving average has been negative. This is the 12th time since 1950. In the past 11 times, the U.S. economy has been in recession,” Charlie Bilello, chief market strategist at Creative Planning, wrote in a post.

Swissbloc chief macroeconomist Henrik Seberg also cited the labor data as a clear indicator, warning that the economy was “headlong into recession.”

“We are in the Twilight Zone. It’s confusing! Same as Q3 2007. But watch the labor market and you’ll get clarity!” he wrote.

Impact of increasing layoffs and recession concerns on cryptocurrencies

A key question now is how these labor market conditions may impact digital assets. Due to the deterioration of the employment situation, risk assets including virtual currencies tend to be under pressure. As recession fears grow, investors often take a more defensive stance, reducing their exposure to volatile assets.

This change is already visible in current market movements. Precious metals have performed well, reflecting the preference for traditional safe assets. However, Bitcoin has struggled to gain traction amid widespread macroeconomic uncertainty and geopolitical tensions.

At the same time, softening working conditions could lead to slower income growth and dampen consumer spending. A pullback in spending could further weigh on speculative assets and reinforce a cautious investment environment.

However, some market participants argue that prolonged economic stress could ultimately support digital assets. Expectations for monetary easing, lower interest rates, and a fresh injection of liquidity during an economic downturn could improve the situation for cryptocurrencies in the long term, making cryptocurrencies a potential beneficiary once risk appetite starts to recover.

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