On the other hand, social media giant Meta eliminated 1,500 roles earlier this month, framing it as a part of its year of efficiency sequel. The job cuts reportedly impacted 10 per cent of its employees in its Reality Labs division who worked on products including the metaverse. This follows Meta chief executive Mark Zuckerberg’s directive to top executives last year to slash their 2026 budgets as the company continues to ramp up its investments in AI research.

Similarly, telecommunications equipment maker Ericsson announced that it was cutting 1,600 jobs in Sweden as part of its recent cost-saving measures. Reportedly, the company has been steadily reducing its workforce in the last three years to maintain profitability. Meanwhile, Autodesk handed over pink slips to 1,000, and Pinterest cut 700 jobs, which was about 15 per cent of its workforce. E-commerce platform Shopify continued its restructuring bid with more cuts, and several other firms, especially in AI and crypto, downsized staff or shut down completely.

What were the key factors that led to job cuts in January?

Firstly, new budgets. According to industry analysts, many companies align their restructuring with new annual budgets and strategic planning cycles. They often use the start of the year to adjust the headcount, which follows reviews of financial forecasts. The second big reason is the rapid push towards AI-driven automation, as several companies were pushed to eliminate jobs that became redundant as they redirected their resources towards infrastructure, data, and engineering divisions.

January layoffs also act as a signal to investors, showcasing commitment to maintaining cost integrity early in the fiscal year. Perhaps, this is the reason why January has become a recurring reset point.

Earlier job cuts were focused on big tech, but January 2025’s layoffs spanned retail, telecom, finance, crypto, manufacturing, education, and AI startups, pointing to a broader slowdown across the technology ecosystem. Although consumer-facing tech giants amounted to the largest numbers, smaller companies and startups experienced deeper percentage cuts, in some cases eliminating entire teams.

For workers, the pattern has become grimly predictable: the year begins with uncertainty, job searches, and hiring freezes, even as companies continue to post strong revenues and invest heavily in AI infrastructure.

Much beyond business strategy

Meanwhile, on professional platforms, HR and leadership experts emphasised that layoffs go beyond business strategy. According to Joseph Gagnon, a solution architect and CCM expert, these decisions are often driven by market cycles and the fear of losing relevance, and not individual performance. “Companies are positioning themselves for the future, even if it means difficult choices in the present. A reminder that sometimes, setbacks are about market forces, not your value,” he wrote in his LinkedIn post.

Jon Leinen, an AI innovator, in his LinkedIn post said that layoffs are not administrative events but identity shocks with long tails. “Executives often frame layoffs as a risk-management measure. Reduce burn. Extend the runway. Preserve the business. Those goals may be necessary, but the framing is incomplete. When leaders reduce the process to transactions and timelines, they introduce second-order risk that is harder to quantify and harder to unwind,” he wrote.

As 2026 begins, January’s numbers show that tech layoffs are no longer a temporary correction; rather, they are a part of a longer recalibration of the industry. The scale may fluctuate year to year, but the message remains the same – the sector is still redefining how many people it needs and where.