Job seekers attend the New York State Department of Labor job fair at the Downtown Central Library on Wednesday, August 27, 2025 in Buffalo, New York, USA.
Lauren Petracca Bloomberg | Getty Images
Outplacement firm Challenger, Gray & Christmas said a sharp rise in layoff announcements in October as companies readjusted staffing levels amid the artificial intelligence boom, a sign of potential trouble in the labor market.
The number of layoffs for the month was 153,074, an increase of 183% from September and an increase of 175% from the same month last year. This was the highest level for October since 2003. It was the worst year for announced layoffs since 2009.
“Just like in 2003, disruptive technologies are changing the game,” said Andy Challenger, the company’s workplace expert and chief revenue officer. “The prospect of announcing layoffs in the fourth quarter is particularly unfavorable at a time when job creation is at its lowest level in years.”
The report provides a glimpse into what the labor market looked like during the Washington, D.C., shutdown, when the government stopped collecting and publishing data.
To be sure, Challenger’s monthly statistics can be very volatile, and the acceleration in layoffs is not yet showing up in weekly state-level unemployment claims, which continue to come in despite the shutdown. Payroll processing firm ADP reported a net gain of 42,000 jobs in October, reversing two consecutive months of losses in the private sector.
But the report comes as Federal Reserve officials express concerns about a weakening labor market. The central bank has cut benchmark interest rates twice since September and is expected to approve another quarter-point cut in December as policymakers look to pre-empt deeper problems.
Challenger reports the highest level of layoffs from the technology sector amid restructuring due to AI integration. Companies in the sector announced 33,281 job cuts, almost six times the September level.
Consumer products also saw a significant increase of 3,409, while nonprofits, a sector hit hard by the government shutdown, recorded a reduction of 27,651 since the beginning of the year, an increase of 419% compared to the same period in 2024.
In total, companies announced 1.1 million job cuts this year, an increase of 65% from a year ago and the highest level since 2020, when the coronavirus pandemic began. October was the highest reduction for a fourth-quarter month since 2008.
“Some industries are correcting course after the pandemic-induced hiring boom, as the adoption of AI, softening consumer and business spending, and rising costs are driving tightening and hiring freezes. Those currently laid off may find it harder to secure new roles quickly, potentially further loosening the labor market,” Challenger said.
