US Professional and Technical Services Sector NAICS 54

Feb 10, 2026 - US Hiring Activity Essentially Frozen

• The US job market is in a “deep freeze,” with hiring at unusually low levels despite unemployment remaining relatively modest, making it harder for job seekers to find work. Employers hired just 5.3 million workers in December 2025, pushing the hires rate well below pre-pandemic norms, even as layoffs remain limited and job growth slowed to its weakest pace outside a recession since 2003. The slowdown reflects a mix of factors, including uncertainty over tariffs, high interest rates that squeeze smaller firms, lingering overstaffing in tech, and fewer workers quitting their jobs, which reduces the need for replacement hiring and reinforces weak labor movement. Immigration restrictions and an aging population have further shrunk the pool of available workers and dampened demand. AI may also be weighing on hiring at the margins - particularly for younger workers - even if economists say it has yet to significantly move the overall labor market.
• US companies are still cutting jobs as they unwind the aggressive hiring and pay raises made during the pandemic, with many executives now saying their workforces simply got too big. Firms like Amazon, UPS, Pinterest, and Nike have announced tens of thousands of layoffs as they try to trim costs, flatten management layers, and operate faster amid economic uncertainty. The cuts are heavily concentrated in tech and logistics, two sectors that expanded the most in 2020 and 2021. While fears about AI-driven mass layoffs loom, economists say most of today’s job losses still stem from overhiring rather than automation, though AI is increasingly shaping where companies invest. Overall unemployment remains relatively low, but hiring has slowed sharply, and laid-off workers are taking longer to find new jobs. Executives warn that continued streamlining - and job disruption - is likely as companies adapt to slower growth and new technologies.

• The traditional consulting giants - McKinsey, Boston Consulting Group (BCG), and Deloitte - are increasingly facing competition from small, AI‑driven boutique firms that leverage advanced tools to deliver highly specialized and efficient services at lower costs. These niche consultancies, often founded by alumni of larger firms, concentrate on areas such as pricing strategy, cost reduction, operational efficiency, and AI‑enhanced analytics, directly challenging the dominance of the established players. By offering more targeted and technology-enabled solutions, these boutiques are making high-level consulting more accessible to mid-market clients who may have previously been priced out of traditional engagements. Larger consulting firms are responding by integrating AI into their core service offerings, automating routine tasks, and rethinking the traditional pyramid staffing model. Some are freezing entry-level salaries or reducing back-office roles while simultaneously investing in technology and upskilling employees, reflecting a broader industry-wide shift in how consulting services are structured, delivered, and valued.
• A recent McKinsey survey of more than 9,500 US adults found that remote flexibility remains a decisive factor in retaining skilled professionals. About 43% of prime-age employees (25-54) already work remotely, while nearly 60% want that option, creating a 17-point expectation gap that fuels resignations. Seventeen percent of recent quitters left after employers tightened in-office mandates, and three-quarters of college degree holders reject inflexible roles. Among those with bachelor’s degrees, 60% currently work remotely and 75% prefer it, while high-income households (making $100,000+) show even stronger preferences (up to 70% favoring remote work). The survey also found women prefer remote work 8 to 3 points more than men, meaning strict attendance policies can undermine diversity and retention. McKinsey data further link flexibility to performance: 35% of hybrid companies reported double-digit revenue growth versus 28% of office-bound firms. The results suggest that autonomy, not proximity, now defines workplace competitiveness.