Tech layoffs were just the start: 1.6 million more US job cuts could push America toward recession

Google's latest workforce reductions have added to a growing wave of technology layoffs in the US, but the bigger concern is whether job cuts will spread to other industries. With more than 200,000 reported technology job losses in 2026, companies across the sector are continuing to restructure as artificial intelligence changes how they operate and how much they spend.

The potential impact could extend well beyond technology. An analysis by 24/7 Wall St. warned that layoffs spreading into retail and financial services could result in another 1.6 million job losses, pushing US unemployment closer to levels associated with a recession.

The warning comes as government data shows that millions of Americans have already experienced layoffs or employment discharges this year. However, the latest figures do not yet point to an increase in the overall layoff rate.

Google joins Microsoft and Oracle as Big Tech layoffs rises

Google has started offering employees voluntary exit packages, according to a Reuters. The move puts the company alongside Microsoft, Oracle and Meta, which have also undertaken workforce reductions or offered buyouts.

Microsoft recently offered buyouts to 60,000 employees, although it remains unclear what the company will do if fewer workers accept. Oracle has cut 21,000 positions, representing approximately 13% of its workforce.

Meta CEO Mark Zuckerberg had earlier planned to eliminate 45,000 jobs, equivalent to around 60% of the company's employees, but subsequently scaled back the plan.

The reasons behind the cuts vary. While some attribute layoff reasons to productivity improvements from artificial intelligence, others point to the substantial spending required to build AI data centers. Several major technology companies have reported negative cash flow as they invest in this infrastructure.

The latest reductions have added to concerns about how AI could change employment across the industry.

Canva, Squarespace and Amazon add to more than 200,000 tech job cuts

The technology layoffs extend beyond the largest US companies. Yahoo Tech's tracker using TrueUp data found that more than 200,000 job losses across the industry in 2026. With companies including Canva, Squarespace, Amazon, Microsoft, Apple and Meta among those affected.

Canva is cutting 22% of its workforce, affecting just over 1,200 employees. The design software company is reorganizing its business by bringing its product, growth and platform teams together and reducing subspecialization.

Squarespace is cutting about 300 jobs/ 19% of its workforce. The company said the changes would simplify operations, sharpen priorities & help it move faster.

Amazon has also reduced staffing across multiple divisions. The company reportedly eliminated fewer than 1,000 white-collar positions in its stores division, affecting employees in the US, India and the UK. Another 250 positions were cut in its devices and services unit.

Dropbox announced cuts affecting around 200 employees, representing 9% of its workforce. The reductions primarily affected engineering, product, design and general and administrative teams.

However not every reduction is directly linked to AI. Companies have also cited restructuring, cost reductions & changing business priorities.

US layoffs reach 13.8 million in the first eight months of 2026

The wider US employment figures show that job separations are not limited to the technology industry.

According to USAFacts data, using Bureau of Labor Statistics data, approximately 1.64 million people experienced layoffs or discharges in August 2026. The measure includes permanent and temporary layoffs, as well as employment terminations connected to mergers, downsizing, business closures and employee performance.

Between January and August, the cumulative number of layoffs and discharges reached 13.8 million. That was 2.3% lower than the corresponding period in 2025.

The monthly layoff and discharge rate stood at 1% in August, below the 1.1% average over the previous 12 months.

The figures show that millions of employment separations are taking place across the US economy, but they do not mean the same number of people have permanently lost their jobs or remained unemployed. The cumulative total also includes monthly events rather than a count of unique individuals.

1.6 million additional job losses could push US unemployment higher

The bigger concerns is what could happen if workforce reductions spread into industries beyond technology.

The analysis suggests that layoffs in retail could reach hundreds of thousands if companies follow the same path as technology businesses. Wider adoption of AI across financial services could also put another six-figure number of jobs at risk.

According to 24/7 Wall St., the publication used a US workforce figure of approximately 163 million people to illustrate the potential scale of the problem. Its calculation suggested that 1.6 million additional job losses could raise unemployment rate by around one percentage point, moving it closer to levels associated with a recession.

However, this is a hypothetical calculation and not a confirmed forecast.