Layoffs soared in October to their highest for the month in 22 years, report says
October proved to be a challenging month for the job market in the U.S., with layoffs reaching over 153,000, making it the worst October for job reductions in 22 years, as reported by outplacement firm Challenger, Gray & Christmas.
Since the beginning of the year, employers have announced a staggering 1.1 million job cuts, the highest number through October since the tumultuous year of 2020, when pandemic shutdowns caused unemployment rates to skyrocket.
The labor market has undergone a significant shift from a period of “no hire, no fire” to one where companies are focusing on cost-cutting measures and turning to AI to replace human workers, resulting in staff reductions.
Andy Challenger, Chief Revenue Officer for Challenger, Gray & Christmas, commented on the situation, stating, “October’s pace of job cutting was much higher than average for the month. Some industries are readjusting after the hiring surge during the pandemic, while AI adoption, decreased consumer and corporate spending, and rising costs are leading to budget cuts and hiring freezes.”
Federal Reserve Chair Jerome Powell expressed concerns about slower hiring when announcing interest rate cuts in September and October. The Department of Labor’s monthly employment report has been delayed due to the government shutdown, which began on October 1, causing a postponement of September’s labor market data and likely impacting October’s report.
Additional data from payroll processor ADP shows limited hiring by private employers, indicating a considerable cooling off of the job market compared to earlier in the year. Challenger added, “Those who have been laid off are facing greater challenges in securing new roles quickly, potentially leading to further loosening of the labor market.”
The National Association for Business Economics predicted last month that the nation’s unemployment rate, which stood at 4.3% as of August, is expected to rise to 4.5% in 2026.
