U.S. employers eliminated 153,074 jobs In October, up 175% from the same month last year, as layoffs rose to recession-like levels, according to a new report. Challenger, Gray & Christmas, an outplacement and executive coaching company, said the layoffs were the most in any October in more than two decades.
Cost cutting and the rise of artificial intelligence were largely to blame, according to the firm.
Technology companies were among those who slashed the most jobs, followed by retail and service companies. The report follows recent layoffs by Amazon, UPS, Microsoft and other corporations implementing more AI in day-to-day operations.
“Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer demand and corporate spending, and rising costs drive belt-tightening and hiring freezes,” Andy Challenger, the chief revenue officer for Challenger, Gray & Christmas, said in a statement. “Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”
A significant rise in layoffs
The October job losses of more than 150,000 compared with 55,597 in October 2024. So far this year, more than 1 million jobs have been eliminated — 65% more than in the first 10 months of 2024.
Challenger, Gray & Christmas attributed much of the reduction to the “DOGE impact,” defined by mass layoffs of federal workers and significant cuts to federal funding for private and nonprofit institutions.
Layoffs have now soared to their highest levels since 2020, when 2 million people had lost their jobs through October amid the COVID-19 pandemic.
Additionally, the report found that 2025 is the worst year for announced job cuts since 2009, during the Great Recession.
Concerning numbers
Challenger said the findings are especially concerning, given that mass layoffs aren’t traditionally seen in the fourth quarter.
“At a time when job creation is at its lowest point in years, the optics of announcing layoffs in the fourth quarter is particularly unfavorable,” Challenger said.
With official job data unavailable because of the federal government shutdown, financial analysts are focusing more on numbers from private firms to better understand the state of the labor market.
Pushback against report
According to USA Today, labor market observers such as Vanguard have largely dismissed the report, accusing Challenger of being a traditionally “poor predictor of future labor market conditions.”
“But against the backdrop of a low-hire labor market, this bout of corporate job-cutting does represent a bigger labor risk than the 2022 tech layoffs when these workers were quickly scooped up by other industries,” a Vanguard spokesperson said in a statement. “However, we ultimately expect that persistent labor supply constraints over the next three years will help offset the unemployment impact of cyclical and technological pressures.”
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