Job Cuts on Cost-Cutting & AI

Challenger, Gray, and Christmas notes Job Cuts on Cost-Cutting & AI

U.S.-based employers announced 153,074 job cuts in October, up 175% from the 55,597 cuts announced in October 2024. It is up 183% from the 54,064 job cuts announced one month prior, according to a report released Thursday from global outplacement and executive coaching firm Challenger, Gray & Christmas.

“October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.

Through October, employers have announced 1,099,500 job cuts, an increase of 65% from the 664,839 announced in the first ten months of last year. It is up 44% from the 761,358 cuts announced in all of 2024. Year-to-date job cuts are at the highest level since 2020 when 2,304,755 cuts were announced through October.

Not only did individual companies announce large layoff totals in October, but a higher number of companies announced job cut plans. Challenger tracked nearly 450 individual job cut plans in October, compared to just under 400 in September. March, which had the largest number of job cuts this year primarily due to cuts at the Federal level, saw roughly 350 individual announcements.

October’s total is the highest for the month since October 2003, when 171,874 cuts were recorded. That month, large announcements occurred in Retail due to acquisitions and in Telecommunication as cell phones gained wide adoption.

“This is the highest total for October in over 20 years, and the highest total for a single month in the fourth quarter since 2008. Like in 2003, a disruptive technology is changing the landscape,” said Challenger.

Job Cuts by Industry

• Technology continues to lead in private-sector job cuts as companies restructure amid AI integration, slower demand, and efficiency pressures. In October, the sector announced 33,281 job cuts, up sharply from 5,639 in September. For the year, Technology firms have announced 141,159 job cuts, up 17% from the 120,470 announced through the same period in 2024.
• Retailers announced 2,431 job cuts in October, down from 2,577 the prior month, but the sector remains among the hardest hit this year. So far in 2025, Retail has announced 88,664 job cuts, a 145% increase from the 36,136 announced through October last year. The sector continues to face cost pressures, shifting consumer habits, and ongoing store closures.
• The Services sector, which includes companies that provide support to other businesses such as cleaning, staffing, and outsourcing firms, announced 1,990 job cuts in October, down from 6,290 in September. Year to date, the sector has announced 63,580 job cuts, up 62% from the 39,296 announced through October 2024.
• Warehousing led all industries in October cuts, announcing 47,878 job cuts, up from 984 in September. Year to date, the sector has cut 90,418 jobs, a 378% increase from the 18,904 cuts announced in the same period last year. The surge suggests ongoing overcapacity and automation-driven restructuring following pandemic-era growth.
• Consumer Products companies announced 3,409 job cuts in October, up from 1,983 in September. For the year, the sector has announced 41,033 job cuts, up 21% from the 33,865 cuts announced during the same period in 2024, as companies adjust production and workforce levels amid softening demand and changing consumer preferences.
• Non-profits continue to be impacted by Government funding as well as rising costs. These entities announced plans to cut 27,651 this year, an increase of 419% from the 5,329 announced by this point in 2024.
• The Media industry has announced 16,680 cuts so far in 2025, up 26% from the 13,279 cuts announced in the first ten months of last year.
• News, which Challenger tracks as a subset of Media and includes broadcast, digital, and print, has announced 2,075 job cuts so far this year, 337 of which occurred in October. That is the highest monthly total since 462 in May. For the year, News cuts are down 41% from the 3,520 cuts announced during the same period last year.

Hiring Plans

(Click on image to enlarge)

• Through October, U.S. employers have announced 488,077 planned hires, down 35% from the 750,333 announced at this point in 2024. It is the lowest year-to-date total since 2011, when 459,971 new hires were planned. On average, employers have announced 48,808 new hires per month, the lowest monthly average since 2011, when an average of 44,798 new hires occurred monthly.
• Included in Challenger’s hiring figure are 372,520 seasonal hiring plans through October (Table 8), the lowest number of announced seasonal hires through October since Challenger began tracking them in 2012.
• “It’s possible with rate cuts and a strong showing in November, companies may make a late season push for employees, but at this point, we do not expect a strong seasonal hiring environment in 2025,” said Challenger.

The two charts paint a complete picture

Except for the Covid pandemic, these are the largest layoffs since 2009 and the smallest hiring plans since 2011.

The lead chart is only through the third quarter.

Challenger reports 1,099,500 job cuts through October. In 2009, total layoffs were 1,288,000.

If there are a combined net 188,501 layoffs in November and December, this would be the second worst total in history dating to 1989, topped only by Covid 2020.

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What a jobs disaster.

I do not believe it’s possible to turn this ship around before the midterm elections.

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