The U.S. Job Cuts Surge: What’s Driving It?

U.S. employers announced more than 1.2 million job losses in 2025, the 7th highest layoff figures since annual redundancies were first tracked in 1989.

Government-led layoffs were a significant factor, with federal budget cuts and DOGE-related actions especially impactful, and staff in the technology, retail, warehousing, and services sectors badly affected by automation, AI adoption, and restructuring.

In this study, we’ll consider how job cuts are evolving in the U.S. employment marketplace, examining regional differences and the significance of key economic drivers. We’ll also look at how the current jobs scenario compares to past U.S. economic downturns.

Firstly, let’s look at recent layoff numbers.

U.S. Job Cuts in 2025 And Beyond

According to employment data, the current U.S. job loss rate is around 1.6 million U.S. workers laid off each month: nearly 19.2 million per year, a 5.9% rise compared to 2024 numbers. Figures for January to June 2025 show 10 million employee dismissals across different U.S. industries and organizations.

Of these figures, over 122,000 employees were laid off from 257 U.S. tech companies, with Intel removing the highest number of staff members, laying off 24,000 employees. Current trends suggest that women face a 25% lower risk of being laid off across the national workforce.

And the trend in mass job cuts is set to continue into 2026: following posted redundancy figures of 1.17 million for November 2025, around 21% of companies are expected to conduct further layoffs, with over 100 companies filing notices for January cuts.

Study data suggests that many of the recent job layoffs were driven by technology and retail sectors embracing AI automation. Unsurprisingly, then, 61% of adults aged 18-34 report layoff-related anxiety due to market volatility. 

Here are some of the imminent/completed layoffs that will affect U.S. workers across the country.

Tyson Foods

• The Lexington, Nebraska, site was set to close on January 20, 2026, with 3,200 jobs set to be lost.
• The Amarillo, Texas, location was due to close on the same day, with 1,700 employees set to lose their jobs.

General Motors laid off 1,140 workers at Detroit’s Factory Zero EV plant on January 5, 2026.

Intel slashed 24,000 roles, 20% of its workforce.

UPS plans to cut 48,000 jobs in 2026.

FedEx will lay off 856 employees from its Coppell, Texas, site by April 2026.

Specific Sector Losses

A Challenger, Gray & Christmas report reveals that July 2025 represented a 140% surge in layoffs on 2024 figures, and puts almost half of those layoffs down to AI- and technology-driven motivation.

Additionally, the unemployment rate rose to 4.2% from 4.1%, while the 62,075 job cuts in July were up 29% on June’s 47,999, and up 140% on the 25,885 announced in July of 2024.

The report goes on to reveal how employees in different sectors were affected by the downturn.

The Government sector was subject to 3,666 job cuts in July 2025, marginally down on June cuts (3,801 jobs), and 292,294 job cuts between January and July 2025, the highest in any sector, mainly due to federal reductions.

Technology was subject to the most job cuts in the private sector (89,251, a 36% increase on the 65,863 in July 2024, primarily due to AI).

Retail announced 80,487 job cuts during July 2025, up 249% from July 2024’s 23,077, with retailers heavily impacted by tariffs, inflation, and ongoing economic uncertainty, all of which led to mass store closures as well as layoffs.

Nonprofit organizations announced 17,826 job cuts in 2025, up 413% on the 3,477 announced in July 2024.

Automotive companies also announced 4,975 job cuts, the highest single-month numbers since November 2024, citing tariffs as the main factor.

The report puts much of the economic uncertainty and hiked layoff numbers down to the Department of Government Efficiency (DOGE), which it cites regarding 289,679 planned layoffs, including store closures, restructuring, and technological updates (including automation and the implementation of AI systems, which was explicitly linked to 10,375 job losses).

When we look closely at the affected areas of the country, we can see some clear regional disparities.

Regional Job Loss Disparities

The Eastern U.S. is clearly the region most affected by job cuts, the surge primarily driven by DOGE-led federal changes in Washington, D.C., which experienced the largest year-over-year increase in job cuts overall, rising 219% from 136,149 in 2024 to 434,385 in 2025.

Other Eastern states to suffer major job losses were:

• New Jersey, where job losses rose from 5,776 in 2025 to 26,695 by July 2025 (a 362% increase).
• New York, which suffered a 43% hike in job losses, from 53,053 in 2024 to 76,038 by July 2025.

Here’s a closer look at a range of Eastern states, plus a 2024-2025 comparison.

The Midwest region suffered a modest but significant 8.7% increase in job cuts: from 82,279 in 2024 to 89,444 in 2025. That said, trends in loss states varied significantly.

• Ohio saw the largest increase, up from 18,802 to 37,938 (a 102% rise). 
• Nebraska fared much worse, with loss rates running at over 500%, from 753 to 4,869.

The Southern region reported a 34% rise in job cuts: from 59,812 in 2024 to 79,868 in 2025.

• Georgia suffered one of the sharpest increases in job losses, up 72% (from 16,298 to 28,068). 
• Florida’s layoff rates also notably rose, increasing 70%. 
• Alabama redundancy rates more than doubled, climbing from 2,702 in 2024 to 6,530 in 2025.

Regional distinctions aside, here are the U.S. states subject to the highest number of layoffs.

And here are the states that featured the lowest number of layoffs over the same period.

Industries Bearing The Brunt of the Downturn

DOGE-led changes mean Government layoffs are notable, but here are the main industries that suffered the most layoffs during 2025.

Not all industries saw layoffs in such high numbers: here are those subject to the lowest number of job losses over the same period.

The table below presents a comprehensive breakdown of total layoffs across all U.S. industries in 2025, providing a broader context beyond the industries with the highest and lowest job losses.

Moving from industry layoff numbers to industry job prospects: how has the economic downturn influenced the extent to which industries can offer new roles?

Hiring Trends in 2025

The new jobs market has offered a sluggish response to mass layoffs. Up to July 2025, employers created 86,132 new positions, compared to 73,596 roles offered up to the same period in 2024. Here is how various sectors fared regarding hiring levels.

The Entertainment and Leisure sector accounted for nearly a third (28,190) of all new hires by July 2025, reflecting a potential revival in seasonal and service-related roles.

The Insurance industry featured 12,800 new job opportunities, compared to none in 2024, while the Automotive sector announced 6,161 new jobs, up from 4,122 over the same period in 2024.

New hires in the Technology sector continue to decline: the 5,510 new roles available in 2025 were down 58% on the 13,263 offered over the same period in 2024. Similarly, Construction (down 76%), Industrial Goods (down 37%), and Energy (down 90%) lost significant ground; in the latter case, new job opportunities fell from 11,327 hires in 2024 to just 1,070 in 2025.

During such a fraught economic and employment period, the needs of those retaining their roles are still critical. But what are the main employee concerns in America in 2026?

Employee Needs

1,504 U.S. workers of a wide range of ages and education levels and from a broad spectrum of industries were surveyed and ranked regarding their key employee priorities for 2026. The results are encapsulated in the following priority rankings, in descending order.

Survey Results: Employee Priorities for 2026

• 73% A Salary Increase
• 58% A Flexible Work Schedule
• 54% A Better Work-life Balance
• 35% Remote Work
• 32% A 4-day Working Week
• 25% A Promotion
• 24% More Career Development Opportunities
• 21% Unlimited Paid Time Off

A Fraught 2026 Jobs Market In America

The alarming U.S. layoff surge, with employers announcing over 1.2 million job cuts in 2025 (the 7th highest recorded figures), continues to evolve and affect multiple industries.

nd although December 2025 layoff rates fell compared to the previous month, year-to-date totals still remain historically elevated, emphasizing the current level of employment instability.

And Government-led layoffs have dominated the layoff surge, largely due to federal reductions and DOGE-related actions, which have affected the job market even more than private-sector industry losses.

Technology, retail, warehousing, and service sector roles continue to be lost in the tens of thousands due to automation, AI adoption, and restructuring: 54,000 layoffs in 2025 alone were due to automation or AI.

Much of the economic uncertainty is down to the Department of Government Efficiency (DOGE)

Layoffs are geographically concentrated, with the Eastern U.S. accounting for the largest share, mainly due to Washington, D.C., New York, and New Jersey.

Hiring remains well below pre-pandemic levels, even as layoffs rise, creating sustained labor market anxiety, especially among younger workers.

That said, some industries show positive signs, with health care and leisure/hospitality among the few sectors adding jobs overall, highlighting a sharply divided labor market.

Structural changes regarding employment in the U.S. will continue in 2026. So how companies operate, how much automation is further integrated, the ongoing level of government downsizing, and how various industries continue to restructure will all evolve.

Although a slowdown in monthly layoffs might look positive, this doesn’t necessarily equate to burgeoning stability, especially after the country has just seen the highest job loss figures in decades.

The modern labor market is increasingly defined by volatility as opposed to recovery, and this shifting emphasis has long-term implications for workers, employers, and policymakers.

The end-of-year 2026 figures will illustrate the extent to which things have improved for U.S. workers, or otherwise.