US layoffs highest in years as employers cut 1.1M roles
What's the story
US employers have announced over 1.1 million layoffs this year, the highest since the COVID-19 pandemic in 2020, according to a report by consulting firm Challenger, Gray & Christmas. The number of job cuts has been attributed to factors such as artificial intelligence (AI), tariffs, and broader economic concerns amid uncertainty.
Job market trends
November sees significant drop in layoffs
Despite the high number of layoffs this year, November witnessed a sharp decline with employers announcing only 71,321 job cuts. This is a major drop from October's figure of 153,000. Challenger Gray & Christmas's Chief Revenue Officer Andy Challenger said this decrease is "certainly a positive sign." However, he also noted that job cuts in November have exceeded 70,000 only twice since 2008: once in 2022 and again in 2008.
Economic indicators
Unemployment claims and layoffs in the tech sector
The latest federal data shows newly filed unemployment claims last week dropped to a three-year low. However, the year-to-date total has now reached 1.17 million layoffs, 54% higher than last year at this time. The telecommunications sector led the way with planned firings in November after Verizon announced plans to cut 13,000 jobs. Tech companies also continued their downsizing trend with a total of 12,377 layoffs announced in November alone.
Layoff reasons
Corporate restructuring and economic conditions drive layoffs
Corporate restructuring was the most cited reason for the November layoffs, with employers also blaming store closings and economic conditions. AI was blamed for 6,280 job cuts in November alone. So far this year, it has been responsible for a whopping 54,694 layoffs as lawmakers warn that it could eliminate up to 100 million jobs in the US over the next decade.
Economic impact
Market and economic conditions lead to job cuts
Market and economic conditions have been responsible for over 245,000 job cuts this year through November. This comes as inflation remains stubbornly high at 3% and the labor market shows signs of weakness. These factors have also slowed down hiring plans with employers announcing only 497,151 planned hires so far this year, a 35% decrease from last year and the lowest since 2010.