Job cuts in October hit highest level for the month in 22 years

Layoff announcements soared in October as companies recalibrated staffing levels during the artificial intelligence boom, a sign of potential trouble ahead for the labor market, according to outplacement firm Challenger, Gray & Christmas.

Job cuts for the month totaled 153,074, a 183% surge from September and 175% higher than the same month a year ago. It was the highest level for any October since 2003. This has been the worst year for announced layoffs since 2009.

"Like in 2003, a disruptive technology is changing the landscape," said Andy Challenger, workplace expert and chief revenue officer at the firm. "At a time when job creation is at its lowest point in years, the optics of announcing layoffs in the fourth quarter are particularly unfavorable."

The report provides a glimpse into the labor market at a time when the government has suspended data gathering and releases during the shutdown in Washington, D.C.

To be sure, the Challenger monthly numbers can be highly volatile, and an accelerated pace of layoffs has yet to show up in state-level weekly jobless claim filings that continue to come in despite the shutdown. Payrolls processing firm ADP reported that October saw net job growth of 42,000, reversing two consecutive months of losses in the private sector.

However, the report comes at a time when Federal Reserve officials have expressed concern about a softening labor market. The central bank has lowered its benchmark interest rate twice since September and is expected to approve another quarter percentage point reduction in December as policymakers look to get ahead of any more serious problems.

Challenger reports the highest level of layoffs coming from the technology sector amid a time of restructuring due to AI integration. Companies in the sector announced 33,281 cuts, nearly six times the level in September.

Consumer products also saw a sharp gain to 3,409, while nonprofits, an area hit hard by the shutdown, listed 27,651 cuts year to date, up 419% from the same point in 2024.

In total, companies have announced 1.1 million cuts this year, a 65% increase from a year ago and the highest level since the Covid pandemic year of 2020. October saw the highest total for any month in the fourth quarter since 2008.

"Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market," Challenger said.