October layoffs hit 22-year high as labor market wobbles, Challenger says
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Attendees line up at a job fair in Florida in 2024. Photo: Joe Raedle/Getty Images
October layoffs surged to the highest level for the month in 22 years, staffing firm Challenger Gray & Christmas said Thursday.
Why it matters: The delicate balance of the no-hire, no-fire labor market may finally be tipping — in the wrong direction, and quickly.
By the numbers: Employers announced 153,074 layoffs in October, the firm said, nearly triple the month prior and the most for any October since 2003.
- The most-cited reason was cost-cutting, accounting for about a third of the layoffs. Not far behind was AI, which accounted for another 20%.
- Nearly 450 companies announced layoff plans, the highest level of the year.
- The warehousing and tech sectors led the October cuts, making up just over half of all jobs losses. Overcapacity, tech-driven efficiencies and the advent of AI were major drivers in those sectors.
Stunning stat: Challenger, which has been tracking layoffs since the early 1990s, said it was the most layoffs for a fourth-quarter month (October-December) since 2008.
- That was the depths of the Great Recession.
What they're saying: "October's pace of job cutting was much higher than average for the month. 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," the firm's chief revenue officer Andy Challenger wrote.
Zoom out: Year-to-date, layoffs total about 1.1 million, up 65% year over year and the highest comparable level since 2020.
- For the year, DOGE and its impacts remain the top reason for layoffs, accounting for nearly 30% of all cuts, per Challenger Gray's data.
The intrigue: The firm noted that it's become particularly unusual over time for companies to conduct such large layoffs in the fourth quarter, as the advent of social media made it easier for people to shame companies for holiday cuts.
- This year's October layoffs, though, are triple the average of the last decade.
- "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," Challenger noted.
What to watch: Whether anemic hiring plans improve any, which would offset some of the cutting.
- Year to date, announced hires are the lowest since 2011, the report noted.
- Holiday seasonal hiring plans are the lowest since the firm started tracking that data in 2012.
Editor's note: This story has been updated with new details on hiring.
