US Mass Layoff Notices Hit Highest Level Since 2016
Mass layoff warnings in the United States have surged to their highest point since 2016, signaling potential trouble for the labor market as hiring remains sluggish.
Key Takeaways
- WARN notices, a precursor to mass layoffs, are at their highest level since 2016.
- October job cuts skyrocketed 175% year-over-year to 153,074.
- Year-to-date layoffs have reached 1.1 million, the highest since 2020.
- Economists warn a weakening job market makes it harder for the unemployed to find new positions.
Goldman Sachs Analysis Reveals Market Shift
A new Goldman Sachs analysis shows Worker Adjustment and Retraining Notification (WARN) alerts have climbed sharply in recent weeks. This surge comes after a period of stability that Federal Reserve Chair Jerome Powell had described as a “low hire, low fire” environment.
Economists previously viewed low layoffs as a crucial “firewall” against recession. However, that protection now appears to be weakening.
Layoff Discussions Spike in Corporate Earnings Calls
Beyond the WARN data, Goldman’s economists found that discussions about layoffs are becoming more frequent in Russell 3000 company earnings calls. Artificial intelligence is increasingly cited as a factor, particularly in the technology sector where approximately half of all layoff-related conversations mentioned AI.
October Job Cuts Show Dramatic Increase
According to outplacement firm Challenger, Gray & Christmas, US employers announced 153,074 job cuts in October alone. This represents a staggering 175% increase from the same month last year and a 183% jump from September.
Workplace expert Andy Challenger attributed the trend to multiple factors: “This comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes.”
Year-to-Date Totals Reach Post-Pandemic High
Through October, employers have announced 1.1 million job cuts—a 65% increase compared to the same period in 2024 and already 44% higher than all of last year. This marks the highest year-to-date total since 2020, when pandemic-driven layoffs exceeded 2.3 million through October.
Economists Express Growing Concern
Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei warned that continued layoff increases are particularly concerning given the current hiring environment. They noted: “A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs.”
Economist Justin Wolfers echoed these concerns on social media platform X, observing: “Unemployment has been rising ‘a tenth of a point here, a tenth of a point there.’ That feels small month to month, but as it has added up month over month, we’ve silently shifted from a very tight market toward a noticeably weaker one.”
