Layoff activity appears poised to increase, particularly from downstream effects of DOGE cuts in funding, further contraction in government payrolls, and from businesses embrace of AI to automate. Some of these planned cuts will involve not filling open positions, but the scale suggests actual job losses are going to rise.

The Challenger report on layoff intentions for July shows announcements are up 29.3 percent to 62,075 from 47,999 in June and are 139.8 percent higher than 25,885 a year ago. For the year-to-date, there are 806,383 announced layoff intentions compared to 460,530 in the same period of 2024.

Layoff announcements in July are led by 13,037 in technology. All sectors reported at least some layoff intentions for July except legal and mining. For 2025 to-date, the largest number of job cuts is in government at 292,294 compared to 37,614 in 2024. Technology jobs cuts are the second largest and total 89,251 in the first seven months of 2025 compared to 65,863 in the January-July period 2024. Retail layoffs are at 80,487 for 2025 to-date compared to 23,077 in the same period 2024.

Among reasons cited for job cuts in July, the largest share is 16,957 in market/economic conditions, followed by closing with 3,084 cuts, and 10,300 related to artificial intelligence. For 2025 to date, the largest number of job cuts is 289,670 for DOGE with another 13,056 in DOGE downstream impacts. For January-July 2025, another 171,083 are attributed to market/economic conditions and 120,226 to closing. The shrinking of federal government employment, the use of AI to replace workers, and contraction in the retail brick-and-mortar sector are leading to the highest numbers in layoffs since the pandemic in 2020 and the Great Recession in 2009.

Hiring intentions in July are essentially unchanged from June and up 0.3 percent to 3,200 after 3,191. Hiring intentions are down 12.9 percent compared to 3,676 in July 2024. Hiring plans are quite limited in July with the largest share in aerospace/defense at 1,250.

This monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state departments of labor. The job-cut report must be analyzed with caution. It doesn't distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs. Also, the job-cut report does not include jobs eliminated in small batches over a longer time period. Unlike most economic data, this series is not adjusted for seasonal variation.

The job-cut report is basically a rehash of the weekly jobless claims report but provides additional insight into where layoffs are occurring. There is industry and geographic (states) detail that is not available with weekly jobless claims.