US Employers Cut 1,53,000 Jobs in October Amid AI and Cost-Cutting

Job cuts across the United States accelerated sharply in October 2025, with employers announcing 153,000 layoffs, the highest October figure in more than two decades. 

Data from Challenger, Gray & Christmas reveals that businesses are restructuring in response to rising operational costs, softer demand, and a growing shift towards artificial intelligence-driven efficiencies.

Technology and Retail Lead Workforce Reductions

The technology sector topped the list of job cuts, followed by retailers and service companies, signalling widespread adjustments across the private sector. Cost-cutting was identified as the leading motive, while automation and AI integration played a growing role in reshaping company structures. 

Many firms that had ramped up hiring during the pandemic are now reducing staff as part of strategic recalibration efforts to manage expenses and streamline operations.

Layoffs Surge 175% Year-on-Year

October’s layoff total represented a 175% increase from the same month last year. In the first 10 months of 2025, companies announced over 1.09 million job cuts, up 65% from 2024 and the highest cumulative total since 2020. 

The number of firms reporting job reduction plans also rose to around 450 in October, compared with fewer than 400 in September, suggesting that cost rationalisation is spreading across industries.

Labour Market Faces Data Gaps Amid Uncertainty

With the ongoing US government shutdown delaying official economic data releases, private reports have become key indicators of employment trends. Analysts caution that sustained layoffs and AI-driven transformations may dampen near-term hiring momentum, even as companies continue to invest in digital capabilities for long-term productivity gains.

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Conclusion

The surge in October job cuts underscores how cost pressures and automation are redefining workforce structures across American industries, marking a critical turning point in the nation’s employment landscape.

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