Layoffs, layoffs, and more layoffs

If you’re currently job searching, you probably don’t need us to tell you that the vibes are off.

The data backs that feeling up: 2025 was the weakest year for job growth since the Covid-19 pandemic, and saw the most layoff announcements since 2020.

Despite corporate America reporting broadly healthy earnings, a slew of huge companies across industries are doubling down on massive layoffs this week:

• Amazon announced yesterday it was cutting 16,000 corporate positions, in addition to the 14,000 jobs it slashed in the fall
• UPS is laying off 30,000 employees, on top of the 48,000 it cut last year
• Pinterest is slashing roughly 15% of its workforce
• Home Depot’s CEO said the home improvement giant would cut 800 corporate roles and bring employees into the office five days a week

Is bad news good news?

None of that sounds very good for the economy, but what does it mean for a stock when a company lays off employees en masse? The short answer: it’s complicated.

On one hand, cutting positions fundamentally reduces costs, which lets a company keep more of its revenue, which helps its bottom line. That’s why, at least in the short term, it can be a boon for a company’s shares. But when a company goes through a restructuring, it’s often a sign that business is struggling, and layoffs are no guarantee that a solution is right around the corner.

On the flip side, a hiring spree can actually signal a potential stock boom, according to some research. After all, when companies are expanding their headcount, it means they have the demand and budget for it, which is an obvious sign of growth.

Then again, hiring new employees is costly—posting jobs, interviewing, training, all take time and money—and researchers have found that the expenses associated with bringing new people aboard can cut into profits. That means it can actually lead to negative returns for a stock.

The long answer: It’s still complicated.—LB