Job Cuts Surge in October, Hitting 22-Year High

David Kudla, the CEO and Founder of Mainstay Capital Management, appeared on Mornings with Maria to share insights on stock trends, the explosive growth of artificial intelligence (AI), and the increasing energy demands driving data centers globally.

In a noticeable pivot, U.S. employers slashed jobs in October at the highest level seen in 22 years, responding to a need for cost-cutting and revised policies. Specifically, the number of job cuts reached 153,074, as reported by Challenger, Gray & Christmas, a renowned outplacement firm. This figure shows a staggering 175% surge compared to 55,597 job cuts in October 2024. Additionally, it reflects an 183% rise from the 54,064 cuts noted in September.

Andy Challenger, a workplace expert and chief revenue officer at the firm, commented, “The rate of layoffs in October significantly surpassed the typical monthly average.” He elaborated that various sectors are adjusting after the hiring boom triggered by the pandemic, pointing to shifts due to AI adoption, declining consumer and business spending, and escalating costs which have led to tighter budgets and hiring freezes.

Challenger also noted that individuals currently on furlough may struggle to find new employment, which could further relax the labor market.

Private Sector Job Growth Exceeds Expectations

The private sector managed to add 42,000 jobs in October, surpassing predictions, according to ADP.

In total, U.S. employers reported 1,099,500 layoffs through October this year—a 65% rise compared to the first ten months of 2024, and 44% higher than the 761,358 job cuts for all of 2024.

Current layoffs in 2025 have reached the highest levels since 2020, when 2,304,755 job reductions were recorded up until October.

October’s layoff total marked the highest monthly figure for the month since 2003, when 171,874 job cuts were reported. Back then, widespread layoffs were seen in retail due to acquisitions and substantial cutbacks in telecommunications as mobile technology gained traction.

Fed Insights on Rate Cuts

The retail sector has been notably affected by layoffs this year, bearing the brunt of job losses.

Challenger remarked, “This is the best October in more than 20 years, and we’re seeing the highest single-month total in Q4 since 2008. Just as in 2003, new technologies are transforming the landscape.”

Interestingly, he pointed out that, historically, companies have tended to avoid announcing layoffs in the fourth quarter, making the spike in October quite unexpected. The rise of social media, he explained, has empowered workers to share their negative experiences, potentially leading employers to announce layoffs sooner than they might have in the past.

Automation and Workforce Changes

The warehousing sector experienced significant layoffs in October, with 47,878 job cuts reported, a dramatic rise from only 984 in September. So far this year, the industry has cut a total of 90,418 jobs, marking an astonishing 378% increase from the same period in 2024.

Within the technology sector, layoffs tallied 33,281 in October, up significantly from 5,639 the previous month. By 2025, tech companies have accounted for 141,159 job reductions, a 17% increase from last year.

Retailers also announced 2,431 cuts in October, down slightly from the 2,577 reported in September. Nevertheless, the retail sector continues to be severely impacted, with 88,664 job cuts in total for the year, representing a 145% rise compared to the same ten-month span last year.