Planned job cuts tracked in October were at their highest level since 2003, according to a new report from executive coaching firm Challenger, Gray & Christmas. It said that hiring isn’t even expected to get its usual seasonal boost.
“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 the firm. While the Federal Reserve Bank recently cut rates, experts believe a December rate cut is less likely.
Already, October brought the lowest figure for seasonal hiring plans (372,520) since Challenger began tracking them in 2012. Last month, U.S. employers announced just 488,077 planned hires overall, the lowest year-to-date figure since 2011. Planned hires were down 35% from 750,333 announced at the same point last year. An ongoing government shutdown has also halted paychecks for some who are employed, forcing them to seek second jobs.
October also stood out for the number of job cut plans tracked (450) the highest for the month in more than two decades. Back in October 2003, a whopping 171,874 cuts were recorded with large announcements “occurred in Retail due to acquisitions and in Telecommunication as cell phones gained wide adoption,” Challenger explained.
Compared to last October, job cuts were up 175%. They were also up 183% compared to September.
“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.
Per the new report, artificial intelligence was the second most cited job cutting factor in October after cost cutting with for 31,039 AI job cuts and 48,414 cost cutting job cuts reported. Recently Audacy reported on Amazon CEO Andy Jassy’s comments that the online retail giant expected AI to reduce jobs, and then its announcement of tens of thousands of layoffs late last month.
Challenger also noted that the impact of Department of Government Efficiency (DOGE) earlier this year lingers, even after the relationship between its figurehead, Elon Musk, and President Donald Trump has cooled. DOGE remains the leading cause of layoffs this year at 293,753 planned layoffs so far.
“This includes direct reductions to the Federal workforce and its contractors,” said Challenger, Gray and Christmas. “An additional 20,976 cuts have been attributed to DOGE Downstream Impact, which reflects the loss of federal funding to private and non-profit entities.”
Industries that cut the most jobs in October include: technology, retailers, services, warehousing, consumer products, non-profits, media and news. In addition to cost cutting, AI and the DOGE Downstream Impact, general economic conditions, closings and restructuring have had an impact on jobs.
All of these factors contributed to the announcement of more than 1 million overall job cuts from the start of the year through October, up 65% compared to the first 10 months of 2024. It’s also 44% higher than the 761,358 cuts announced in the entirety of last year and the highest year-to-date since 2020, when the world was in the throws of the COVID-19 pandemic.
“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,” during another tumultuous economic time – the Great Recession – said Challenger. “Like in 2003, a disruptive technology is changing the landscape.”
Challenger added that it is especially surprising to see layoffs in the fourth quarter. Companies have tended to avoid doing so in the age of social media and viral posts about being laid off right before the holidays.
“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,” he added.
ADP also recently issued a lukewarm report for the October U.S. jobs market.
“Last month delivered a rebound from two months of weak hiring, but the bounce wasn't broad-based,” said the firm. “Education and health care, and trade, transportation, and utilities led the growth. For the third straight month, employers shed jobs in professional business services, information, and leisure and hospitality.”