US-based employers in October announced the highest level of monthly job cuts since 2003, according to job outplacement firm Challenger, Gray and Christmas.
Employers announced 153,074 job cuts in October due to slowing consumer and corporate spending, adoption of artificial intelligence (AI), belt-tightening and hiring freezes tied to the federal government shut down. The October announcements are up by more than 180pc from September job cuts announcements as well as October 2024 levels.
"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," said Challenger. "Like in 2003, a disruptive technology is changing the landscape. At a time when job creation is at its lowest point in years, the optics of announcing layoffs in the fourth quarter are particularly unfavorable."
Federal blackout, slowing job creation
The monthly Challenger report comes as federal government data has largely been unavailable due to the shutdown, leaving the Federal Reserve, government and corporate planners mainly with private data to rely on for their hiring and investment planning.
The last official US employment report before the shutdown showed only 22,000 jobs added in August, with a revision showing 13,000 jobs lost in July. Job growth averaged 128,000/month for the 12 months through August.
Year-to-date October announced jobs cuts reported by Challenger totaled nearly 2mn, the highest for the period since 2020, when 2.3mn cuts were announced in the first 10 months of the year, when Covid-19 struck and shut down large swaths of the economy.
Year-to-date October hiring plans dropped to 488,077 hires from 750,333 announced during the same period last year, according to Challenger. It is the lowest year-to-date October total since 2011.
The leading reason for job cuts so far in 2025 was attributed to the "DOGE impact," a reference to the Elon Musk-led Department of Government Efficiency (DOGE), cited for 293,753 planned layoffs, including direct reductions to the federal workforce and its contractors. DOGE Downstream Impacts, reflecting the loss of federal funding to private and non-profit entities, accounted for 20,976 planned layoffs.
"Like in 2003, a disruptive technology is changing the landscape," said Challenger.
Cost cutting was the top reason employers cited for layoffs — 50,437 in October alone.
AI was the second-most cited monthly factor, leading to 31,039 cuts as companies restructure and automate, with 48,414 cited year to date.
Market and economic conditions accounted for another 21,104 cuts in October, bringing the year to date total to 229,331.
