US layoffs to cross 1 million in 2025? 9,50,000 jobs cut so far this year; US government shutdown may add to losses
The US economy is staring at a prospect where its job losses for the year could cross 1 million! Nearly 95,00,00 layoffs have happened by US employers through September 2025, marking the highest such figures since 2020, according to outplacement specialists Challenger, Gray & Christmas quoted in a CBS report.The increase in workforce reductions coincides with a slowdown in the labour market, with organisations significantly reducing their recruitment plans, as employment data indicates. Firms are planning to recruit 58% fewer staff for the remainder of the year compared to their projections from the previous year.Challenger, Gray & Christmas predicts the job cuts might exceed 1 million in 2025. Whilst current job losses are significant, they remain considerably lower than the 2020 figures, when pandemic-related business closures resulted in 2 million layoffs through September that year, according to Challenger’s analysis.
US job cuts – grim picture
“Previous periods with this many job cuts occurred either during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology,” said Andy Challenger, senior vice president and labour expert for Challenger, Gray & Christmas according to the CBS report.Additional job losses might result from the government shutdown, as the White House Office of Management and Budget has instructed federal agencies to consider staff reductions during any closure period.The upcoming October 3 government jobs report is expected to be delayed due to the federal shutdown, with economists projecting 50,000 new jobs added last month according to FactSet data.In light of the delayed government report, economists are turning to alternative labor market indicators to assess employment conditions.ADP’s private sector employment report showed a decline of 32,000 jobs in September.There are indications that job cuts may be slowing down. Challenger’s latest data revealed businesses announced approximately 54,000 job cuts in September, marking a significant 37% decrease from August’s nearly 86,000 announced cuts.Economists are closely monitoring these various employment metrics to gauge the overall health of the labor market during the government shutdown period.Federal Reserve Chair Jerome Powell announced a 0.25 percentage point reduction in the benchmark interest rate, citing concerns about worker challenges, with plans for two more rate cuts in 2025. The Fed is closely monitoring the labor market for signs of weakness.Lower borrowing costs could provide support to the job market, as businesses would have greater capacity to expand and hire when interest rates decrease.The labor market is currently facing multiple challenges, according to Challenger.“Right now, we’re dealing with a stagnating labor market, cost increases and a transformative new technology. With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring,” Challenger said.The Federal Reserve’s actions reflect its ongoing efforts to balance economic growth with labor market stability through monetary policy adjustments.
