US Job Cuts Soar Amid Slash in Federal Workforce — Evening Brief – 03.10.25
U.S.-based employers announced a staggering 172,017 job cuts in February, marking a 245% increase from January 2025 and the highest monthly total since July 2020, according to the latest Challenger Report from Challenger, Gray & Christmas. This surge brings the year-to-date total for the first two months of 2025 to 221,812 announced cuts, a 33% rise compared to the same period in 2024.
Key Driver: Federal Government Layoffs
The surge was predominantly fueled by significant reductions in the federal workforce, attributed to the policies of President Donald Trump’s administration. The report highlights the influence of the Department of Government Efficiency (DOGE), which has spearheaded efforts to shrink government size through mass layoffs, funding freezes, and spending cuts.
Federal government job cuts accounted for 62,242 of the announced layoffs in February, affecting 17 different agencies. Washington D.C. was the most impacted geographic area due to the concentration of federal jobs. The broader “DOGE impact” was cited as the leading reason for 63,583 job cuts, encompassing both direct government layoffs and reductions among contractors tied to federal funding.
“Private companies announced plans to shed thousands of jobs last month, particularly in Retail and Technology,” said Andrew Challenger, SVP and workplace expert for Challenger, Gray & Christmas. “With the impact of DOGE actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February.“
Beyond Government: Other Sectors Affected
While government cuts dominated, other industries also contributed to the surge: Retail, technology, services, and consumer products sectors reported notable job cut announcements, reflecting wider economic challenges. Downstream effects included an additional 894 job cuts in private non-profits, resulting from the loss of federal funding.
Labor Market Implications
The report notes that these announced cuts may not immediately reflect in official employment data, such as the February employment report, due to their timing outside the survey period. However, future impacts are anticipated in government employment figures, as federal layoffs take effect, and contractor employment, as reduced federal spending ripples through the economy. Additionally, the report warns of potential voluntary departures, as remaining government staff face uncertainty and unease, which could exacerbate workforce reductions.
Broader Context
Despite the sober Challenger report, and the ADP report released on Wednesday showing just a 77,000 gain in February, other labor market indicators offer a more positive view. Unemployment remains low, and wages are still rising—up 4.7% annually for those staying in their jobs and 6.7% for those switching roles in February. Sectors like leisure, hospitality, and professional services continue to add jobs, suggesting that hiring remains solid in certain areas.