The unending wave of tech layoffs in 2026 is giving way to something much harder to spot. The June 2026 jobs report suggests the labor market in US is no longer tied to mass layoffs. Instead, employment trends in US show that positions are never opened in the first place for hiring to take place. Employers are facing economic uncertainty, increased borrowing costs, and rapid AI expansion.
Companies aren’t hiring like they used to a decade ago. Instead of making headlines with tens of thousands of layoffs this year, employers are slowing hiring, raising efficiency expectations and restructuring around AI expansion.
This particular employment trend in US is visible across Big Tech. Microsoft, Meta, Google and Amazon have all continued restructuring parts of their workforce while also committing billions of dollars to AI infrastructure. Executives increasingly describe AI as a productivity gainer, suggesting future growth may come from AI investments rather than an increase in headcount.
June Jobs Reports in USA shows a hiring slowdown
According to this Friday’s jobs report, USA added 57,000 jobs in June. The show hiring comes as a surprise amidst economists’ expectation of 110,000 jobs. Average monthly job growth over the past three months is still slower at 110,000 jobs, however, it’s stronger than the scenario some Fed officials posited at the start of the year.
The unemployment rate in US declined to 4.2% compared to 4.3% the previous month. Yet, roughly 720,000 left the labor force in June. Labor force participation has been the lowest since March 2021 as it comes down to 61.5% in June 2026 jobs report.
The strong payroll reports for April and May were revised lower as well, by 31,000 and 148,000 in April and 129,000 for May.
Hiring becomes selective
The labor market in US is increasingly becoming a ‘low-hire, low-fire’ economy. While layoffs remained low, companies were also reluctant to add new employees.
The job’s report on Friday also showed that companies are increasingly selective about where they hire. Professional and business services added 36,000 jobs, healthcare added 22,000 jobs, and social assistance added roughly 25,000 jobs. At the same time, leisure and hospitality sector lost 61,000 – the biggest decline since 2020.
Hiring has become extremely selective, favoring sectors tied to specialized knowledge while customer-facing sectors face greater pressure.
The result is a labor market in the US that isn’t collapsing but also becoming increasingly difficult to enter.
Layoffs in 2026 may continue to dominate the headlines, however slower hiring, shrinking labor force participation and AI-driven efficiency gains could have an even greater impact on US employment rate in US.
If the last two years were defined by mass layoffs in tech, the next phase of the labor market in US will be defined by jobs that are never created. This shift won’t generate the same number of headlines but it could prove to be far more consequential for job seekers, employers and the unemployment rate in US.
Subscribe to the The HR Digest magazine to receive exclusive HR news and insights directly to your inbox.
