Job Losses Raise Fears of US Recession: What Does This Mean for Cryptocurrencies?

In the past week, a series of large US corporations in various fields, including Amazon and Pinterest, have announced plans to make large-scale layoffs. The move follows a volatile year for the labor market, when U.S. businesses eliminated about 1.2 million jobs. Signals from the labor market are making analysts increasingly concerned about the risk of an economic recession.

On Wednesday, Amazon, the e-commerce giant, decided to cut about 16,000 office workers, following 14,000 layoffs in October last year. According to Beth Galetti, Amazon’s Senior Vice President of HR Experience and Technology, the cuts are part of a restructuring strategy to “strengthen the organization, reduce the management layer, increase ownership, and eliminate bureaucracy.” At the same time, Amazon continues to step up investment in artificial intelligence (AI) initiatives.

Pinterest has also announced that it will cut less than 15% of its workforce and shrink office space, with the goal of focusing resources on AI-related priorities. The restructuring process is expected to be completed before September 30, according to a dossier sent to the regulator.

In addition, United Parcel Service (UPS) plans to eliminate up to 30,000 operating positions this year, while Nike also plans to cut staff. According to CNBC, Nike will lay off about 775 employees to improve business efficiency and expand the application of automation technology. These are just a few of many large enterprises announcing plans to lay off personnel in 2026.

Rising layoffs and weakening job prospects have added to fears of a recession in the US

Layoff announcements often appear in the first quarter of the year, when businesses review their budgets and personnel needs after announcing business results. However, compared to previous years, this trend is becoming more worrying.

According to Global Markets Investor, the number of layoffs in the US in 2025 has skyrocketed by 58% compared to the previous year, bringing the total number of lost jobs to the highest level since the 2020 pandemic. If we exclude the special conditions of 2020, 2025 recorded the most serious layoffs since the 2008 global financial crisis.

“History shows that such large-scale layoffs only occurred during recessions: 2001, 2008, 2009, 2020, as well as the post-recession years of 2002 and 2003,” Global Markets Investor said.

The prolonged job search time makes the situation even more worrying. On average, it now takes about 11 weeks for unemployed workers in the US to find a new job – the highest level since 2021.

In addition, the perceived ability to find a new job fell to a record low of 43.1% in December 2025, down 4.2% year-on-year. These signals have raised concerns about an economic recession among experts.

Charlie Bilello, Director of Market Strategy at Creative Planning, said: “Over the last three months, the U.S. lost an average of 22,000 jobs per month — the third consecutive month with a negative three-month average. This has happened 12 times since 1950, and in all 11 of the previous 11 times, the U.S. economy has fallen into recession.”

Henrik Zeberg, Macroeconomist at Swissblock, also warned that the U.S. economy is “heading straight for a recession,” with labor data being a clear indicator. He said: “We are in a blurry, turbulent intersection – just like in the third quarter of 2007. But look at the labor market, you will see everything clearly!”

How can rising layoffs and recession fears affect cryptocurrencies?

The issue of concern today is how labor market developments will affect digital assets. A weak employment environment often puts pressure on risky assets, including cryptocurrencies. As recession fears increase, investors tend to turn defensive, reducing the proportion of highly volatile assets.

This trend has been clearly reflected in the market. The precious metal recorded an outperforming performance, indicating that investors are prioritizing traditional haven channels. Bitcoin, on the other hand, has struggled to maintain its growth momentum amid macroeconomic uncertainty and geopolitical tensions.

A weak labor market can also lead to slowing income growth, causing consumer spending to decline. This puts more pressure on speculative assets, reinforcing cautious investment sentiment.

However, some argue that if economic tensions persist, digital assets can benefit in the long run. Expectations of monetary policy easing, lower interest rates, or new liquidity packages during a recession could improve the outlook for cryptocurrencies, making them a potential beneficiary as investors’ risk appetite recovers.

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