Challenger, ADP Reports Point to Concerns for U.S. Employers, Workers

Two employment reports released this week — one on job cuts and the other on hiring and pay — painted a less-than-rosy picture of the state of U.S. employers and workers.

Job Cuts Rose 183% in October, Up 175% Year-Over-Year

A report released Thursday, Nov. 6, by outplacement firm Challenger, Gray & Christmas showed U.S.-based employers initiated 153,074 job cuts in October, up 183% from September and 175% from October 2024. This is the highest one-month job cut total since October 2003, when 171,874 cuts were recorded.

What’s behind this surge? Employers cited:

• Cost-cutting as the top reason, responsible for 50,437 announced layoffs.
• Artificial intelligence (AI) implementation as the second-most cited factor, leading to 31,039 job cuts as organizations continue to restructure and automate. AI has been cited for 48,414 job cuts this year.
• Market and economic conditions as responsible for another 21,104 cuts, bringing the year-to-date total for this reason to 229,331.
• Closings of stores, units and plants as triggering 16,739 cuts for the month and 161,391 for the year.
• Restructuring as the factor in 7,588 cuts, for a total of 108,038 so far in 2025.

“October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas. “Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”

Through October, employers have announced:

• 1,099,500 job cuts, an increase of 65% from the 664,839 announced in the first 10 months of last year. That total is up 44% from the 761,358 cuts announced in all of 2024. Year-to-date job cuts are at the highest level since 2020 when 2,304,755 cuts were announced through October.
• 488,077 planned hires, down 35% from the 750,333 announced at this point in 2024. That total is the lowest year-to-date total since 2011, when 459,971 new hires were planned. On average, employers have announced 48,808 new hires per month, the lowest monthly average since 2011, when an average of 44,798 new hires occurred monthly.

Private Sector Added 42,000 Jobs in October; Pay Is Up 4.5%

American private-sector employment increased by 42,000 jobs in October and pay was up 4.5% year-over-year, according to a report released Wednesday, Nov. 5, by ADP Research in collaboration with the Stanford Digital Economy Lab. The ADP National Employment Report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million private-sector employees.

“Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year,” said ADP chief economist Nela Richardson. “Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced.”

October hiring growth wasn’t broad-based. Education, healthcare, transportation and utilities led the growth; but for the third straight month, employers shed jobs in professional business services, information, and leisure and hospitality.

Looking at employer size, companies with:

• 500 or more employees gained 74,000 jobs
• 250 to 499 employees gained 3,000
• 50 to 249 employees lost 25,000
• 20 to 49 employees gained 5,000
• 1 to 19 employees lost 15,000

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