AI is changing the landscape. Layoffs in the U.S. reached the highest level in 22 years in October

U.S. companies in October announced the biggest layoffs in more than two decades, data from consulting firm Challenger, Gray & Christmas showed. Businesses in the U.S. are ramping up cost optimization measures, fighting among other things the costs of duties, while artificial intelligence is reshaping industries, Bloomberg explained the trend. In 2003, when the previous surge was recorded, the labor market was being reshaped by the advent of cell phones, recalled Challenger, Gray & Christmas top executive Andy Challenger. As then, "disruptive technology is changing the landscape," he said.

Last month, 153,074 layoffs were reported - almost three times as many as in September and October 2024, according to the report. Most of the layoffs were in the technology and logistics sectors. At the same time, the number of announced layoffs has exceeded one million since the beginning of the year, the highest level since 2020, when the business reported cutting 2.3 million positions due to the pandemic, Challenger, Gray & Christmas wrote. In addition, U.S. employers' announced hiring plans this year are the lowest since 2011.

Here are a few of the report's findings:

- Some industries are now adjusting after a pandemic hiring surge, but employment is also being impacted by the introduction of artificial intelligence, weakening consumer and corporate spending and rising costs that are forcing companies to shrink and freeze hiring, the report said.

- Those who are laid off now have a harder time finding new jobs quickly, which could further weaken the labor market, the authors said.

- If rates are lowered and November shows strong results, companies will take a late seasonal hiring spurt, but for now Challenger, Gray & Christmas does not expect high seasonal hiring in 2025.

Futures on U.S. stock indices practically did not react to the publication of the report. They are trading in a slight plus.

In recent weeks, Bloomberg reminds us, Target announced 1,800 job cuts, or about 8% of its corporate workforce, Paramount Skydance laid off 1,000 employees, and Amazon said it was going to cut 14,000 corporate positions - after its CEO warned that artificial intelligence would reduce headcount. Other companies include Starbucks, Delta Air Lines, and Rivian Automotive. Last month, United Parcel Service said it had cut 34,000 operations staff, including couriers and movers, due to productivity gains from automation.

The growing number of announcements of layoffs may contradict the recent statement of the head of the U.S. Federal Reserve Jerome Powell about the "very gradual cooling" of the labor market, draws the attention of Bloomberg. At the same time, following the results of the last meeting of the Fed on October 28-29, when the decision to reduce the rate was made, the regulator recognized that the risks of deterioration of the situation have increased, and reaffirmed its commitment to support employment.

As the U.S. government shutdown continues, economists, including Fed governors, have to rely on private sector data. Its employment rose by 42,000 in October after two consecutive months of decline, ADP Research data released Nov. 5 showed. That suggests some stabilization, although it's consistent with a general weakening, Bloomberg points out. Revelio Labs will also release a labor market report later on Nov. 6.

This article was AI-translated and verified by a human editor