US labour market is facing a troubling trend, with job cuts reaching their highest level in five years. According to a new report from Challenger, Gray & Christmas, over 1 million Americans have lost their jobs so far this year, which is the worst job loss figures since the pandemic-era layoffs in 2020.
This surge in layoffs tells us deeper economic pressures, including high inflation, rising interest rates, and corporate restructuring. The number of announced job cuts for 2025 has already surpassed 1.17 million by November, a significant increase of 54% compared to the same period in 2024.
Rising layoffs
The November report revealed that US-based employers announced 71,321 job cuts, up 24% from the 57,727 cuts reported in November 2024. Though this marked a slight decrease from the massive cuts in October, which topped 153,000, November’s numbers were still among the highest for the month in recent years.
Andy Challenger, a workplace expert and the report’s author, told Newsweek that although the November dip is positive, job cuts above 70,000 have only occurred twice since 2008, once in 2022 and another time during the financial crisis of 2008.
The year-to-date job cut total for 2025 is the highest since 2020, with layoffs more than doubling compared to the same period last year. By the end of November, 1.17 million job cuts had been announced, an alarming statistic that indicates a broader shift in the economy.
Why is there increasing number of layoffs?
Experts point to several factors contributing to this wave of job cuts. Michael Ryan, a finance expert, stated that the economic slowdown is driven by rising costs and persistent interest rates. “Consumer spending is slowing as people grapple with higher costs,” he told Newsweek.
“Companies are betting on AI and automation to do more with less. After aggressively hiring post-pandemic, many businesses are now scaling back as they reassess their staffing needs.”
AI and automation have particularly hit the tech sector hard, with companies like Verizon announcing substantial layoffs in November.
The sector has seen a 17% rise in job cuts from last year, with AI-related layoffs alone accounting for nearly 55,000 jobs in 2025. Additionally, restructuring and tariffs have been significant contributors to the cuts.
Layoffs impacting consumer confidence
The wave of layoffs is taking a toll on consumer confidence. A report from the Federal Reserve Bank of New York revealed that nearly 39% of Americans believe their financial situation will worsen in the coming year, the highest figure since November 2023. As layoffs increase, many are questioning the long-term stability of the economy.
The latest Labor Department data painted a slightly brighter picture. Weekly jobless claims unexpectedly fell to 191,000, the lowest in more than three years.
However, these numbers were influenced by large drops in California and Texas, likely due to the Thanksgiving holiday, and may not fully reflect the underlying weaknesses in the labor market.
Job cuts have slowed slightly from their October peak, the overall job market remains fragile. Employers have announced 497,151 planned hires in 2025, down 35% from the same point in 2024.
The decline in hiring prospects suggests that the job market may continue to cool as companies focus on cost-cutting measures rather than expansion.