In October, U.S. employers cut around 153,000 jobs, marking the highest number of layoffs in that month for two decades. This brings the annual total to over a million job losses. A recent report suggests that many companies are attributing these cuts to the rise of AI.
The last time October saw higher layoffs was back in 2003, when 171,874 workers were let go.
Experts indicate that, much like the 1980s, these layoffs are tied to a technology-driven shift in the economy. Back then, the telecommunications sector faced upheaval due to mobile phones, while today, tasks traditionally performed by humans are increasingly being automated through AI.
According to Challenger, Gray & Christmas, about 31,039 layoffs in October were linked to artificial intelligence, coming second to general cost-saving measures.
Andy Challenger, the firm’s chief revenue officer, remarked, “Just like in 2003, disruptive technologies are changing the game.”
Interestingly, AI has accounted for a relatively small portion of the layoffs this year, with just 48,414 related directly to it.
October’s layoffs represented a staggering 183% increase compared to September’s 54,064, and a 175% rise from the same month last year.
Over 1.09 million job cuts have been announced in the first ten months of 2025, which is a 65% jump from last year’s 664,839 layoffs, the highest figure since 2020 when job losses surged due to the pandemic.
“Some industries are adjusting after the pandemic-era expansion, as AI adoption, reduced spending, and rising costs prompt layoffs and hiring freezes,” Challenger added.
The technology and warehousing sectors led in job cuts last month, with tech companies announcing 33,281 layoffs, a significant rise from 5,639 in September. Warehousing saw 47,878 layoffs, buoyed by overcapacity stemming from pandemic growth and automation.
So far in 2025, the tech industry has shed 141,159 jobs, up 17% compared to the same period in 2024.
The retail sector faces ongoing challenges, with 88,664 job cuts this year—an increase of 145% from last year—as retailers struggle with declining discretionary spending and ongoing store closures.
Challenger observed, “It’s unusual to see such layoffs in October, as companies often avoid announcing cuts in the fourth quarter.”
Layoffs have also affected warehousing, service, and consumer products, with media and nonprofit organizations reporting increased losses due to automation and reduced government support.
Nonprofits saw 27,651 layoffs, a 400% increase, while the media industry faced a 26% rise to 16,680 job losses, according to Challenger.
Cost reductions were cited in October for 50,437 job cuts, followed closely by reasons linked to artificial intelligence, market conditions, and facility closures.
The wave of layoffs shows little sign of abating.
Companies such as Amazon, Target, Paramount Skydance, and Starbucks have announced significant job cuts as they brace for the holiday season.
Amazon, for instance, plans to eliminate about 14,000 corporate roles as part of an organization-wide restructuring aimed at reducing bureaucracy and reallocating resources toward AI.
Target has also revealed its first major layoffs in a decade, cutting 1,800 positions—approximately 8% of its head office workforce—amidst sluggish sales.
UPS recently disclosed plans to lay off 48,000 employees as it undertakes a comprehensive cost-cutting strategy.
In the entertainment sector, Paramount Skydance is cutting around 2,000 jobs—about 10% of its workforce—following a merger approval earlier this year.
Starbucks has notified Washington state regulators about laying off 974 employees in Seattle and Kent starting December 5, responding to changes in the post-pandemic landscape.
As layoffs rise, hiring plans have significantly diminished.
Employers announced intentions to hire 488,077 people through October, which represents a 35% decrease from a year prior and the lowest figure recorded since 2011.
Seasonal hiring has also dropped dramatically, with only 372,520 jobs reported—this being the lowest pre-holiday total since Challenger began tracking data in 2012.
Challenger noted, “Announcing layoffs in the fourth quarter is particularly challenging when job creation is at a historical low.” He added that those currently furloughed may struggle to find new employment quickly, which could further loosen the labor market.
