In just the first five months of 2025, U.S. companies have announced nearly 700,000 job cuts, reflecting an 80% increase from the same period in 2024. According to data from Challenger, Gray & Christmas, employers reported 696,309 layoffs through May—just 65,049 short of matching the total job cuts for all of last year.
The month of May alone saw 93,816 announced job cuts. While this was a 12% drop from April’s 105,441, it still marked a 47% increase compared to the same month last year. The reasons behind these rising layoffs are varied, but a consistent theme is economic pressure. Consumer spending has slowed, companies are facing funding challenges, tariffs are biting into operations, and overall economic uncertainty is forcing employers to reduce costs. As a result, businesses are pausing hiring and downsizing their workforces to stay afloat.
The tech industry remains the most affected, with major firms like Amazon, Google, Meta, and Microsoft continuing to shed jobs. In May alone, tech companies announced 10,598 layoffs, bringing the total for the sector this year to 74,716—a 35% increase over the same period in 2024. Microsoft, for instance, has already cut around 6,000 jobs this year and is expected to make further reductions, particularly within its Xbox division, as it reorganizes in response to increasing investments in artificial intelligence.
AI has become a significant factor driving these changes. As companies prioritize AI development, roles are being eliminated to make room for new skill sets and capabilities in that area.
The services sector has also seen a major impact, reporting 44,273 job cuts so far this year—up 79% from 2024. Retail is close behind, with 75,802 planned layoffs, marking a staggering 274% rise from the 20,276 retail jobs cut in the same period last year. After government-sector layoffs, retail is currently the second hardest-hit industry.
The labor market also reflects subtle changes in employment patterns based on immigration status. Foreign-born workers experienced a slightly higher rate of unemployment in 2024 compared to native-born workers. This trend may worsen under the Trump administration’s 2025 immigration policies, which are expected to increase job competition in favor of native-born citizens.
The national unemployment rate stood at 4.2% in May 2025, consistent with the 4.0%–4.2% range it has maintained since May of the previous year. One notable factor repeatedly cited in layoff announcements this year has been the impact of DOGE-related market disruptions, which have been linked to 284,044 planned job cuts.
Several major employers have made substantial reductions to their workforce. Hyatt, for instance, cut approximately 30% of its U.S. customer service and support staff. Meanwhile, Voice of America and its overseeing body issued layoff notices to 639 employees, essentially halting the broadcaster’s operations.
At the government level, internal communications suggest the State Department may begin terminating hundreds of Washington, D.C.-based employees this week as part of Secretary of State Marco Rubio’s push to streamline what he calls an overly complex federal bureaucracy.
