U.S. employers cut just over 1.2 million jobs in 2025, a 58% leap from the prior year and a fourth consecutive year of increasing cuts, reported staffing and executive coaching firm Challenger, Gray & Christmas.
The most recent quarter was particularly grim, with 259,948 jobs erased — the most in the fourth quarter since the beginning of the “great recession” in 2008. That was up 29% from the third quarter and was 71% more than the Q4 2024 total.
The month of December was a small bright spot, bucking the fourth-quarter trend with the fewest job cuts in any month since July 2024. “While December is typically slow, this, combined with higher hiring plans, is a positive sign,” said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas.
To that point, plans to hire 10,496 workers were announced in December, up 16% from November and 31% from December 2024.
However, Challenger’s viewpoint could be considered fairly optimistic, considering that for the full year, the number of planned hires announced was down 34% from 2024, to 507,647. Additionally, the number of seasonal-worker hiring in the fourth quarter fell to 372,520, the lowest since Challenger began tracking them in 2012.
As to reasons for job cuts announced in 2025, actions by the federal Department of Government Efficiency led the way with 293,753. Next came market and economic conditions (253,206), store/unit/department closings (191,480) and restructurings (133,611).
By comparison, artificial intelligence was responsible for far fewer layoffs (54,836). But that number will, it appears, increase drastically going forward, given that there were a mere 16,989 AI-related cuts in 2023 and 2024 combined.
Tariffs were not much of a factor in the job market, cited as the cause for just 7,908 cuts last year.
Sector by sector, the DOGE-driven layoffs were primarily behind a whopping 703% hike from 2024 in government layoffs, to a total of 308,167. The warehousing industry was also hit badly, up 317% to 95,317.
Job cuts were also high in retail (up 123%) and services (up 68%). The technology and media sectors both had 15% more cuts than the prior year.
State by state, the most job cuts were announced in the District of Columbia (303,778), California (175,761), New York (109,030), Georgia (80,893, a big jump from 18,590 in 2024) and Washington (78,943, up about 50%).
Meanwhile, the technology industry was by far the leader in announced hiring plans, with 258,599. Next was retail (112,873), entertainment/leisure (29,324) and automotive (14,698).
