- U.S. employers announced 1.1 million layoffs through October 2025, a 65% year‑over‑year rise and the highest YTD total since 2020.
- Layoff signals—WARN notices and earnings‑call chatter, often blaming AI—suggest worsening labor market and rising recession risks.
As the holiday shopping season kicks off amid economic uncertainty, a sobering report from Wall Street analysts and outplacement firms paints a stark picture of the American job market.
Mass layoff warnings have reached their highest levels since 2016—outside the COVID-19 chaos—signaling potential trouble ahead for workers already grappling with sluggish hiring and rising costs.
This isn’t just a blip; it’s a trend that’s accelerating, with announcements piling up at a pace that could foreshadow broader weakness in the economy.
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Details of the Economic Trend Report
The latest data, crunched by economists at Goldman Sachs, shows a sharp uptick in Worker Adjustment and Retraining Notification (WARN) alerts.
These are the mandatory notices companies must file before executing large-scale job cuts, giving employees at least 60 days’ heads-up.
After the pandemic-era spike, the volume of these warnings had stayed relatively subdued for years.
But in recent weeks, they’ve climbed to levels not seen since 2016, according to the bank’s analysis.
It’s a red flag in a labor landscape that’s been stuck in what Federal Reserve Chair Jerome Powell dubbed the “low hire, low fire” rut back in September.
This frozen state—where businesses aren’t adding many jobs but also aren’t slashing them—had offered some comfort to economists.
Low layoff rates acted as a kind of “firewall” against a deeper recession, as Mark Zandi of Moody’s put it in an earlier assessment.
But that buffer appears to be eroding. Goldman’s report highlights not just the WARN notices but also a surge in layoff chatter during earnings calls from Russell 3000 companies.
What’s Causing These Layoffs?
The share of firms mentioning staff reductions has jumped lately, and in the tech sector, artificial intelligence keeps popping up as a culprit.
About half of the layoff discussions in the last two reporting quarters tied directly to AI adoption, the economists noted.
Diving deeper into the numbers, outplacement firm Challenger, Gray & Christmas released figures last week that underscore the momentum.
In October alone, U.S. employers announced 153,074 job cuts—a staggering 175 percent increase from the same month last year and a 183 percent leap from September.
“This comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” wrote Andy Challenger, the firm’s executive director, in the report.
Zoom out, and the picture gets even grimmer.
Through the first 10 months of 2025, total announced cuts have hit 1.1 million.
That’s a 65 percent jump from the 664,839 reported in the same period of 2024, and already 44 percent above last year’s full-year total of 761,358.
For context, this is the highest year-to-date figure since 2020, when 2.3 million cuts were announced by October amid the height of the pandemic lockdowns.
Economists and Experts Weigh In
Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei didn’t mince words in their assessment.
“A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs,” they wrote.
It’s a double whammy: Not only are more people at risk of losing their positions, but the job search is tougher in a market where openings aren’t keeping pace.
Economist Justin Wolfers echoed that sentiment on X earlier this week, pointing to the creeping rise in unemployment.
“Unemployment has been rising ‘a tenth of a point here, a tenth of a point there.’ That feels small month to month, but as it has added up month over month, we’ve silently shifted from a very tight market toward a noticeably weaker one,” he posted.
To be sure, the actual layoff numbers haven’t exploded yet.
The Labor Department’s most recent weekly report showed initial jobless claims dipping to 216,000 last week, down from 222,000 the prior period and below economist expectations of 224,000.
That’s a sliver of good news, suggesting the pain isn’t fully hitting paychecks just yet.
But remember those WARN notices? They precede the cuts by about two months, and Challenger’s announcements typically do the same.
In other words, the layoffs flagged now could start rippling through households right around the new year—hardly the upbeat backdrop anyone wants for resolutions and fresh starts.
Consumer and Economic Trends
This buildup comes at a precarious time.
Consumer spending, the engine of the U.S. economy, is softening as inflation lingers and borrowing costs stay elevated.
Corporate America, squeezed by higher interest rates and the push toward efficiency tools like AI, is pruning payrolls to protect margins.
Tech giants have been vocal about restructuring for the AI era, but the ripple effects are hitting retail, manufacturing, and services too.
Challenger’s October tally, for instance, included thousands of cuts at big names like Boeing and Intel, though the firm didn’t break out specifics in its headline numbers.
For workers on the front lines, the anxiety is palpable.
Job seekers are facing longer searches, with applications piling up unanswered and interviews feeling like a lottery.
Recruiters report a mismatch: Employers want more specialized skills in areas like data analytics and AI ethics, but the broader market remains flooded with generalists displaced from traditional roles.
It’s a shift that’s not just statistical—it’s personal, upending family budgets and community stability.Looking ahead, the Federal Reserve will be watching these indicators closely as it weighs interest rate moves.
Powell’s “low hire, low fire” equilibrium was meant to cool inflation without tipping into recession, but if layoff warnings keep climbing, that delicate balance could shatter.
Goldman Sachs sees “growing signs of weakness in the U.S. job market,” and they’re not alone.
Other forecasts, from Moody’s to the Conference Board, are dialing up recession odds if hiring doesn’t rebound.
As we head into December, these trends bear close watching. Will the holiday hiring bump provide a counterweight, or will it just mask deeper fractures?
For millions of Americans, the answer could define not just their 2026, but the trajectory of the entire economy.
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