U.S. Layoffs Surge to 20-Year High in October as Companies Tighten Costs and Embrace AI
U.S. employers announced more than 150,000 job cuts in October, marking the largest monthly reduction in over two decades, according to a report released Thursday by Challenger, Gray & Christmas. The surge comes as companies across industries ramp up cost-cutting measures and adopt AI-driven efficiencies.
The report revealed that tech firms led the wave of layoffs, followed by retailers and the services sector. Cost reduction was cited as the main driver of October’s job cuts, followed by the integration of artificial intelligence, which continues to reshape workforce structures across multiple industries.
Job Cuts Soar 175% Year Over Year
Layoffs in October jumped 175% compared to the same month last year, reaching 153,074, the data showed. From January through October, U.S. employers have announced 1,099,500 job cuts, up 65% from 664,839 over the same period in 2024.
So far in 2025, job cuts have reached their highest level since 2020, when employers announced more than 2.3 million layoffs during the pandemic’s peak.
AI Adoption and Rising Costs Drive Workforce Restructuring
“Some industries are correcting after the pandemic hiring boom, but this comes as AI adoption, weaker spending, and rising costs force many companies to tighten budgets and freeze hiring,” said Andy Challenger, Chief Revenue Officer at Challenger, Gray & Christmas.
In addition to large-scale layoffs, a growing number of firms are preparing to trim staff. The firm tracked nearly 450 individual job cut plans in October, up from under 400 in September.
Market Impact Amid Ongoing Government Shutdown
With the U.S. government shutdown extending to record length, private-sector data like this report is drawing closer attention from investors seeking insight into the labor market’s health and broader economic trends.
