US job cuts rise to ‘recession-like’ levels through October: Report

US job cuts hit 1.1 million so far, reaching ‘recession-like’ levels through October: Report

Layoffs in the United States have accelerated dramatically in October, indicating that 2025 job cuts have reached levels typically seen during recessions, according to newly released data from Challenger, Gray & Christmas, a private firm that tracks workplace reductions.

US employers have announced 1.1 million layoffs so far this year — the largest since the pandemic recession in 2020 and on par with the extensive jobs cuts observed during the Great Recession of 2008 and 2009.

This sharp increase is fueling growing concerns about a significant slowdown in the labour market as big companies like UPS, Amazon and Target have already cut multiple jobs across their business units.

What is reason behind these layoffs?

Employers have pointed to cost-cutting measures and artificial intelligence as the top two reasons for job reductions in October, the Washington Post reported. “We're entering new territory with these layoffs in October,” said John Challenger, CEO of the consulting firm that tracks job losses.

Challenger also said that the scale of recent job-cuts — including 48,000 from UPS and 30,000 from Amazon signals a “real shift in direction.” Data shows that these mega layoffs primarily affect technology, retail, service and warehousing jobs.

Employers announced more than 153,000 job cuts last month, a 183% increase from the previous month, marking the worst October for layoffs since 2003, according to the Challenger report, as quoted by the Washington Post.

Which is the worst-hit sector?

The technology industry, in particular, has been hit hard, with employers citing slowing demand and disruptions from artificial intelligence as the reasons behind the job cuts. Technology companies have accounted for more than 141,000 job cuts so far this year, according to Challenger, a 17% increase from the same period last year.

The surge in layoffs comes at a critical time, as a US government shutdown, now in its second month, has left policymakers, investors, and economists without the latest official data.

While the job market has been a major pillar of stability for the economy in recent years, these job cuts indicate that employers are moving beyond just curtailing hiring and are now actively slashing jobs altogether.

How is the US economy doing?

Despite the layoffs, the overall economy appears steady so far. The unemployment rate as of August, the latest available data, was relatively low at 4.3%. However, economists warn that the picture could quickly change, Washington Post reported.

A separate report this week, from the paycheck processor ADP, showed that private companies added a modest 42,000 jobs in October, after two months of declines. However, it also revealed significant job losses concentrated in white-collar industries, such as information (down 17,000 positions) and professional and business services (down 15,000), according to the news report.

The Federal Reserve, which has been focusing on bringing down inflation, has recently turned its attention to the weakening labour market. Last week, the central bank cut interest rates by a quarter percentage point, citing new “downside risks” to employment.

“You see a significant number of companies either announcing that they are not going to be doing much hiring, or actually doing layoffs,” Federal Reserve Chair Jerome H Powell said in a news conference after the decision. “We're watching that very carefully.”

Source: LiveMint
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