U.S. Hiring Signals Strength as Layoffs Plunge — But 2025 Saw Highest Job Cuts Since 2020 — Evening Brief – 01.08.26
The U.S. labor market closed out 2025 on a notably calmer note on the layoffs front even as broader annual trends highlighted ongoing structural shifts. According to outplacement firm Challenger, Gray & Christmas, employers announced 35,553 job cuts in December, down 50% from November and 8% from a year ago — the lowest monthly total since July 2024 and the softest December figure since 2023.
“The year closed with the fewest announced layoff plans all year,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, noting that while December is typically slower, the combination of lower cuts and higher hiring plans is a constructive sign after a year of elevated job-cut announcements.
Companies outlined plans to hire 10,496 workers in December, the highest for that month since 2022 and up 16% from November, and 31% above hiring plans in December 2024, even though full year announced hiring plans fell 34% to 507,647 roles.
For 2025, employers announced 1.21 million job cuts, the highest annual total since 2020 and a 58% jump from 761,000 in 2024, underscoring how aggressive restructuring earlier in the year contrasts with the more benign December snapshot. Fourth-quarter announcements reached 259,948 cuts, the highest Q4 figure since 2008 and 29% above Q3 2025, highlighting that the late-year moderation followed an intense period of retrenchment.
The government sector accounted for the largest share of 2025 cuts, with 308,167 announced, primarily at the federal level—roughly eight times the number of government jobs cut in 2024. Technology employers announced 154,445 job cuts over the year, including 909 in December, up 15% from 133,988 in 2024, as the industry continues to adjust to prior over-hiring and rapid investment in artificial intelligence capabilities. Warehousing employers announced 95,317 job cuts, a 317% increase from 2024 as the sector recalibrated after pandemic-era expansion.