US companies made deep cuts in August, laying off 85,980 employees, making it the highest number of job cuts for the month since 2020, according to outplacement firm Challenger, Gray & Christmas.
This surge in layoffs comes amidst economic uncertainty due to a shift in the labour market as companies scale back their expansion plans.
Hiring intentions also plummeted, reaching the weakest August figures on record, with only 1,494 jobs announced. This is a huge decline from previous years.
The industries seeing the most hiring activity were aerospace and defense, industrial goods, and retail. However, despite these areas of growth, the broader trend is one of caution, as businesses take a wait-and-see approach to the economy’s future.
Adding to the concerning picture, the number of job openings fell to its lowest level in nearly a year. For the first time since 2021, there are now more unemployed individuals than available job vacancies, further reflecting the cooling labour market.
Andrew Challenger, senior vice president at Challenger, Gray & Christmas, noted that “September is typically when we begin to see large seasonal hiring announcements, which foretell how retailers expect the holiday season to go. Coming off the lowest August on record for hiring plans, it may be a troubling sign.”
Layoffs and workforce reductions have remained prevalent in 2025, following job cuts in tech, media, finance, manufacturing, retail, and energy over the past two years.
The reasons behind these staff reductions vary, many are driven by cost-cutting strategies amidst the rapid advancement of technology.
A survey by the World Economic Forum revealed that 41% of companies globally plan to reduce their workforces over the next five years due to the rise of artificial intelligence.
Tech giants such as Oracle, CNN, Dropbox, and Block have already announced job cuts tied to AI advancements. At the same time, new opportunities are emerging, with tech jobs in areas like big data, fintech, and artificial intelligence expected to double by 2030, according to the WEF.