Factory Job Cuts Near 2009, COVID Levels as Manufacturers Slash Headcount
S&P Global says US factory job cuts in June ran near their highest levels since the 2009 financial crisis and the COVID pandemic, even as the headline manufacturing PMI beat expectations at 55.7.
US factory employment is bleeding at a pace not seen outside of true crisis periods. Job cuts at U.S. factories ran near their highest levels since the end of the global financial crisis in 2009 and the Covid-19 pandemic as worries grew over global demand and rising costs, S&P Global reported Tuesday.
The kicker: the headline manufacturing print actually beat expectations, masking what is happening underneath.
The headline beat, the internals didn’t
The S&P manufacturing flash reading for its purchase managers index came in at 55.7, up narrowly from May and better than the Dow Jones consensus estimate for 54.8.
Though the firm’s manufacturing index ran better than expected for June, it came largely from an inventory rebuild and despite sharp job cuts that were the most since 2009, excluding the massive labor reductions at the onset of the Covid crisis in 2020.
Translation: companies are building stockpiles into supply fears, not hiring into real end-demand.
Why employment is rolling over
Manufacturers have reduced their headcount in three of the past four months, seeking to reduce costs and concerned about demand. Input prices remain elevated and the demand outlook is murky, so the lever firms are pulling is payroll.
Supplier delivery times lengthened in June to the greatest extent since August 2022, linked to shipping disruptions from the Middle East conflict and ongoing tariff pressures.
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The macro backdrop
This isn’t a one-off print. Layoff plans hit their highest January total since the global financial crisis while hiring intentions reached their lowest since the same period, outplacement firm Challenger, Gray & Christmas reported earlier this year. U.S. employers announced 108,435 layoffs for that month, up 118% from the same period a year ago. The total marked the highest for any January since 2009.
Lucid Motors announced a second mass layoff of 2026 on Monday, cutting approximately 1,500 workers, 18% of its workforce, as the U.S. EV market cools.
The labor side of the “no-hire, no-fire” narrative is starting to crack, and manufacturing is leading the way down.
It’s not uniformly negative
Manufacturing employment rose by 23,000 in 2026 through May, according to the Bureau of Labor Statistics, and iCIMS data showed manufacturing tech hiring up 4% since May 2025 as factories invest in automation.
So the year-to-date picture isn’t a collapse, but the June sub-index is a sharp reversal. Watch whether July confirms the trend or fades.
Options market and stocks to watch
Industrials and rate-sensitive names are the cleanest expressions of this data:
CAT: Caterpillar is a global manufacturing bellwether. Watch for guidance commentary on order books versus inventory destock risk.
DE: Deere screens for the same demand-versus-inventory dynamic flagged in the PMI.
LCID: Lucid just announced another 18% workforce cut. Watch flow for continued downside hedging in the EV cohort.
XLI: The industrials ETF is the easiest macro proxy for whether traders treat this as a blip or a turn.
TLT: Weakening manufacturing employment is a bond-bid input. Watch long-duration Treasuries if more soft labor data follows.
For more market news, stay tuned.
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