After a staggering spike to start the new year, job cuts across the US economy receded in February, a welcome development to be sure.

Layoff announcements were 48,307 last month, Challenger, Gray & Christmas said Thursday.

That was less than half the cuts tallied in January and down 72% from the same period a year ago, the largest YoY drop in quite some time.

“February’s dip is a nice reprieve from the elevated job cut plans to start the year,” Andy Challenger said.

By sector, layoffs are still heavy in Tech, which announced another 11,039 cuts last month. That makes 33,330 for the year so far, up more than half versus the first two months of 2025.  “AI is the big story [but] Tech is responding to a number of pressures right now,” Challenger remarked.

Out of all 2026 announced job cuts, AI’s directly responsible for just 8% of planned layoffs. I think that understates the case.

Although openly boasting of AI-enabled cost-cutting might be good for a given company’s stock price, human replacement can be a PR problem. I imagine some firms, particularly those which aren’t publicly traded, don’t shout about it from the rooftops when they replace Joe with HAL.

Anyway, hiring plans recovered in February, but remain weak. Recall that January’s tally was the lowest for that month ever, so when you hear macro Pollyannas praising a 140% MoM increase in hiring intentions, consider the comp.

The figure above shows you a decade of Februarys. Last month’s total was down by almost two-thirds from February of 2025.

Total hiring plans across the first two months of 2026 are just over 18,000, down more than half versus the first two months of last year.

As far as the outlook, Challenger gently suggested events in the Mideast could have an adverse impact. “With US involvement in a growing war in Iran, the end of Q1 may bring more layoff plans,” he said, adding that companies might “tighten belts amid uncertainty and higher costs.”