U.S. companies cut more than 150,000 jobs in October, marking the steepest monthly wave of layoffs for that month since 2003, according to new data from Challenger, Gray & Christmas. The scale of job reductions reflects a combination of cost-cutting, automation, and a slowing economy that continues to reshape the labor market.
The outplacement firm reported 153,074 job cuts in October, up 175% from the same month a year earlier and 183% higher than in September. With these additions, employers have now announced just over 1.09 million layoffs this year, about 65% more than in 2024 and the highest ten-month total since the pandemic year of 2020.
Tech and Warehousing Lead the Slide
Technology companies accounted for 33,281 job cuts in October, nearly six times the number announced the previous month. Warehousing followed with 47,878 layoffs, suggesting continued overcapacity after years of rapid expansion. Retailers trimmed another 2,431 jobs, bringing their total to nearly 89,000 so far this year, a 145% rise over last year’s count.
The services sector, which includes support and outsourcing firms, reported nearly 2,000 cuts for the month, while consumer product manufacturers announced about 3,400. Nonprofits, already under pressure from reduced federal funding, have eliminated more than 27,000 positions this year, a 419% surge from 2024.
A Broader Labor Tightening
Analysts say some companies are unwinding pandemic-era hiring while adjusting to softer spending and tighter budgets. The adoption of artificial intelligence is playing an increasing role in these changes. In October alone, AI-related restructuring led to more than 31,000 job cuts, bringing the 2025 total tied directly to automation to over 48,000. Cost-cutting accounted for another 50,000 layoffs last month.
Market conditions and closures also continued to weigh on employment. Firms cited economic uncertainty for roughly 21,000 October cuts, while plant or store shutdowns accounted for more than 16,000.
The “DOGE Impact” and Federal Contraction
One of the year’s most significant labor developments has been the so-called “DOGE Impact,” which refers to large-scale reductions in federal agencies and related contractors. These have contributed to nearly 294,000 announced cuts so far in 2025. An additional 21,000 layoffs stemmed from the secondary effects of reduced government funding on private and nonprofit sectors.
Together, these government-linked contractions make up more than a quarter of all layoffs this year, amplifying concerns about the stability of public-sector employment.
Fewer Hiring Plans Point to Slowing Momentum
At the same time, companies are scaling back recruitment. Challenger’s data show that U.S. employers have announced fewer than half a million planned hires through October, a 35% drop from last year and the lowest level since 2011. Seasonal hiring has also fallen to its weakest point since tracking began in 2012, with just over 372,000 expected positions.
This reduction in hiring activity, coupled with the elevated layoff pace, signals growing caution among employers heading into the final quarter.
A Rare Fourth-Quarter Wave
Historically, firms have avoided announcing mass layoffs late in the year due to the public backlash such timing often generates. The report notes that from 2014 to 2024, October job cuts averaged around 47,000, less than one-third of this year’s total.
This October’s 153,000 cuts mark not only the highest for that month in more than two decades but also the largest fourth-quarter total since 2008. Back then, widespread financial turmoil forced employers to make deep cuts ahead of the recession.
Looking Ahead
The Federal Reserve’s recent rate reductions (bringing its benchmark rate down to a range between 3.75% and 4%) have offered some relief to borrowers but have yet to translate into stronger hiring. Economists expect that continued pressure from automation, efficiency drives, and federal retrenchment will keep job growth muted through year-end.
While some displaced workers may find opportunities in emerging AI-related roles, the broader data suggest a labor market losing its earlier resilience. The Challenger report warns that those laid off now are facing longer job searches than in previous cycles, a sign that this latest surge in cuts could mark a deeper structural shift in how American companies manage labor in an AI-driven economy.
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