Private companies in the United States slashed 301,000 jobs in January, indicating a disrupted recovery in the labor market amid Omicron surge, payroll data company Automatic Data Processing (ADP) reported Wednesday.

"The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth," said Nela Richardson, chief economist at ADP.

"The majority of industry sectors experienced job loss, marking the most recent decline since December 2020," she said.

Richardson noted that leisure and hospitality saw the "largest setback" after substantial gains in fourth quarter 2021, with job losses of 154,000.

Service sector saw 274,000 jobs lost in January, while goods-producing sector cut 27,000 jobs, according to the report produced by the ADP Research Institute in collaboration with Moody's Analytics.

Large firms slashed 98,000 workers, medium-sized businesses let go of 59,000, while small companies cut 144,000 employees, the report showed, indicating an unbalanced recovery across different company sizes.

The ADP report came two days before the crucial monthly employment report to be released by the Labor Department's Bureau of Labor Statistics, which will include employment data from both the private sector and the government.