December saw the lowest number of planned layoffs in 17 months in a sign the labor market might be leveling out following intense cuts earlier this year, according to a report from Challenger, Gray & Christmas.
US employers announced 35,553 layoffs last month – a 50% drop from November and down 8% from the same time in 2024, according to the report released Thursday. It was the lowest monthly count of layoffs since July 2024.
“The year closed with the fewest announced layoff plans all year,” Andy Challenger, chief revenue officer at Challenger, said in a statement. “While December is typically slow, this coupled with higher hiring plans, is a positive sign after a year of high job cutting plans.”
But the year-to-date total for 2025 reached 1.2 million layoffs – up 58% from the 761,358 cuts announced in 2024. That’s the highest annual level since the 2020 pandemic.
The numbers also marked the worst fourth quarter – with 259,948 planned layoffs – since the 2008 financial crisis.
The government sector led with the most layoffs in 2025 after Elon Musk’s Department of Government Efficiency, or DOGE, purged federal workers at the start of the year.
A whopping 279,445 government job cuts were announced in the first quarter. Over the following nine months, there were 28,722 government layoffs.
Technology also recorded 154,445 layoffs in 2025, which Challenger attributed to artificial intelligence and “over-hiring” over the past decade.
Warehousing, retail and services industries also saw substantial losses as they grappled with supply chain issues, automation, higher prices and economic uncertainty, particularly concerning tariffs.
The media industry announced 17,163 layoffs in 2025 – up 15% from 2024. No planned media cuts were recorded for December.
DOGE cuts, store closings, economic conditions and restructuring were the top reasons employers listed for layoffs in 2025. Artificial intelligence was also responsible for 54,836 cuts, and tariffs for 7,908.
US companies also announced plans to hire 10,496 workers in December, up 31% from a year ago.
Analysts have been paying greater attention than usual to private reports like Challenger’s after last year’s 43-day government shutdown led to holes in the country’s economic data.
While the Challenger report nodded to massive layoffs, especially at the start of the year, weekly initial jobless claims have come in fairly steady throughout most of 2025.
The number of Americans filing new applications for unemployment benefits rose slightly last week to 208,000. The four-week moving average of claims hit its lowest level since April 27, 2024, according to the Labor Department.
While initial claims have not spiked, the number of Americans who have been out of work for more than six months rose to 1.9 million in November – up from 1.7 million the previous year.
Hiring figures have also come in weak. Monthly payroll growth averaged just 55,000 throughout 2025. December payroll growth – which will be published Friday – is expected to notch 73,000.
The unemployment rate jumped to 4.6% in November, its highest level since September 2021, and wage growth has crawled to its slowest pace since before the pandemic.
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