Topline
American companies have cut more than 1 million jobs so far this year, a new report showed Thursday, ranking 2025 among the worst years for job losses in decades as companies embrace artificial intelligence, consumer spending softens and hiring freezes take effect.
A UPS truck driver makes a delivery in Santa Fe, New Mexico.
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Key Facts
Private and public employers cut 153,074 jobs in October, according to a report from career services firm Challenger, Gray & Christmas, a 183% increase from the month before and a 175% spike over the same month last year.
More than 1 million jobs have been cut so far this year, up 65% from the 664,839 announced in the first 10 months of 2024 and 44% more than cuts made in all of 2024.
The government, responsible for more than 300,000 job losses, remains the sector with the most cuts this year, followed by the technology, warehousing, retail and service sectors.
Job cuts have surpassed 1 million in a year only four other times in the last 32 years: 2001 (when the dot-com bubble burst), 2008 and 2009 (in the midst of the Great Recession) and 2020 (when the COVID pandemic struck).
Andrew Challenger, chief revenue officer and labor expert for Challenger, Gray & Christmas, blamed the adoption of artificial intelligence, federal budget cuts, lower customer and corporate spending and rising costs for the job cuts announced in October.
Last month brought the highest number of job cuts for any October since 2003, when large layoffs were announced in the telecommunications sector as cell phones gained wide adoption.
Crucial Quote
“Like in 2003, a disruptive technology is changing the landscape,” Challenger said.
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Surprising Fact
Challenger said to see so many job cuts in October is surprising because large layoff announcements in the fourth quarter have fallen out of vogue. He said the onset of social media has brought negative publicity to companies that lay off workers before the holidays, calling the practice “particularly cruel.”
What To Watch For
Challenger anticipates a further loosening of the labor market as those who have been laid off struggle to find new jobs, and said he doesn’t expect a strong holiday hiring season. The firm says companies have so far announced plans to hire about 375,000 seasonal employees, the lowest number of seasonal hires announced by November since Challenger began tracking in 2012.
Key Background
Few measurements of the American labor market are available amid the government shutdown, and large employers like Amazon, Starbucks, Target and UPS have all announced layoffs in recent weeks. A Wednesday report from payroll processing firm ADP, however, showed that employment in the private sector accelerated faster than expected last month. Recent months brought a historic decline in private sector payrolls, but 42,000 jobs were added in October, the report says. The Federal Reserve has forecast a weakening labor market in recent months, but Fed Chair Jerome Powell said last week he has seen only a “very gradual cooling.”