A new report shows planned layoffs at US firms in January have reached their highest monthly level in seven years, as the US recession took an increasingly heavy toll on employment.

Outplacement company challenger Gray & Christmas released its monthly report on US job cuts on Wednesday.

The report says job cuts announced in January totaled more than 241,000, up 45 percent from December.

It says big job cuts were seen across a wide range of industries due to the economic slump.

The report says record downsizing in the retail sector is the biggest area for job cuts and contributed to the overall rise in January's total.