AI-Driven Layoffs Surge to 22-Year High as Companies Embrace Automation Over Human Workers

AI and Cost-Cutting Lead to the Worst October Layoffs in 22 Years

Employers eliminated more than a million jobs so far this year, an increase of 65% when compared to the first 10 months of last year. In October, U.S. companies executed more layoffs than in any other October in 22 years. The surge was driven by the rapid adoption of AI and significant cost-cutting. According to a report released Thursday from human resources consulting firm Challenger, Gray & Christmas, U.S. companies announced 153,074 job cuts last month, the most for any October since 2003 and almost triple the number during the same month the previous year. October saw the highest number of layoffs for any month in the fourth quarter since 2008. Layoffs in the technology and warehousing industries drove the high numbers, with the warehousing sector slashing 48,000 roles, while the tech industry eliminated more than 33,000 jobs in October. Related: 'Total Panic': Target Is Planning to Cut 8% of Its Global Corporate Workforce -- Its First Major Layoffs in a Decade United Parcel Service (UPS) contributed to the warehouse layoffs, announcing a total of 48,000 job cuts for the year in late October. About 34,000 eliminations came from operational roles, including drivers and warehouse staff. Meanwhile, in the tech sector, Amazon laid off 14,000 corporate workers in October, one of the largest job cuts in the company's corporate history, while Meta eliminated over 600 jobs in its AI and risk divisions. "Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending and rising costs drive belt-tightening and hiring freezes," Andy Challenger, chief revenue officer for Challenger, Gray & Christmas, said in a statement. Related: Intel Is Reportedly Cutting 20% of Its Workforce Under a New CEO In October, cost-cutting was the primary reason employers gave for job reductions, responsible for 50,437 job cuts, per the report. AI was the second most common answer, leading to 31,039 layoffs in October as companies restructured and automated tasks. Market and economic conditions came in third, accounting for 21,104 job cuts for the month. Amazon CEO Andy Jassy said during Amazon's quarterly earnings call last week that the company cut jobs to strengthen culture and get rid of excess layers of management, not because of AI or cost-cutting. Amazon aims to operate like "the world's largest startup," and the layoffs were meant to reshape its culture, according to Jassy. Employers have eliminated 1,099,500 jobs so far this year, per the Challenger report. That's an increase of 65% when compared to the 664,839 cuts announced in the first 10 months of last year, and up 44% from the 761,358 job cuts carried out in all of 2024, per the report. Related: Microsoft Executive Says Using AI Has Saved $500 Million in Productivity Costs, as the Company Conducts Mass Layoffs When it comes to hiring, the report noted that on average, employers have announced 48,808 new hires per month, the lowest monthly average since 2011. By another measure, the U.S. economy added more jobs than anticipated in October. Payroll processor ADP noted earlier this week that the U.S. added 42,000 private-sector jobs in October, more than expected. The month's job gains were centered in trade, transportation and utilities, education, health, finance and construction, per ADP.

Cost cutting, AI lead to surge in planned US layoffs in October

Layoffs announced by US employers surged in October as companies sought to cut costs and embrace artificial intelligence, marking the highest level for the month in 22 years and suggesting labor market dynamics could be shifting toward more firings. Planned layoffs soared 183% to 153,074 last month, global outplacement firm Challenger, Gray & Christmas said on Thursday. That was the highest reading for any October since 2003. Announced layoffs were 175% higher compared with October 2024. "Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes," said Andy Challenger, workplace expert at Challenger, Gray & Christmas. "Those laid-off now are finding it harder to quickly secure new roles, which could further loosen the labor market." The jump was led by technology companies, with 33,281 job cuts announced, sharply up from 5,639 in September. Amazon last week said it would cut up to 14,000 jobs from its global corporate workforce. Small businesses pulling back on hiring Planned layoffs so far this year have soared 65% to just over 1 million compared to the first 10 months of 2024. Despite the surge in announced job cuts, actual layoffs have largely remained low this year, at least through mid-September, before a shutdown of the government imposed a blackout on official economic data. The longest shutdown on record has not, however, stopped states from collecting data on weekly applications for unemployment benefits and sending it to the Labor Department. Economists have accessed the data and made their own estimates, which have shown no deviation from what they and policymakers have dubbed a "no hire no fire" labor market. Cost-cutting was the top reason employers cited for job reductions in October, accounting for 50,437 announced layoffs, Challenger, Gray & Christmas said. AI was the second-most cited factor, making up 31,039 of the planned job cuts. Though hiring intentions picked up amid recruitment for the holiday season, the monthly average of 48,808 was significantly lower than the 64,163 recorded in 2024. Lackluster hiring was corroborated by a separate report from Gusto, a payroll and HR software platform for small businesses, which showed job losses in October for the first time since January. "This isn't a crisis, but it's a clear signal that sustained high interest rates, tariff uncertainty and rising costs are finally forcing even the most resilient corner of our economy to pump the brakes," said Andrew Chamberlain, principal economist at Gusto. "The fact that small businesses, which have been adding jobs every month for most of this year, are now pulling back tells us these economic headwinds aren't theoretical anymore. They're showing up in real hiring decisions."

America's Layoff Crisis Deepens As AI Quietly Replaces Workers America's Layoff Crisis Deepens As AI Quietly Replaces Workers - Amazon.com (NASDAQ:AMZN)

The U.S. labor market is flashing red across the board. While official government data remains paused due to the government shutdown, private-sector reports are sending an unmistakable signal: layoffs are soaring, hiring is collapsing, and artificial intelligence is quietly replacing workers at an unprecedented pace. In October alone, U.S.-based employers announced 153,074 job cuts, according to Challenger, Gray & Christmas report released Thursday. That's a 175% increase from the same month last year, and the highest October total since 2003. "October's pace of job cutting was much higher than average for the month," said Andy Challenger, chief revenue officer at the firm. "This comes as AI adoption, softening demand, and rising costs drive belt-tightening and hiring freezes." Companies cited cost-cutting as the top reason for October layoffs, followed closely by AI-driven restructuring. Combined, these two forces accounted for over 81,000 job cuts last month alone. Job Cuts In 2025 Just Crossed The 1 Million Mark So far this year, U.S. employers have announced 1,099,500 job cuts, a 65% increase from the same period in 2024 and already surpassing last year's total by 44%. This puts 2025 on pace for the worst year of layoffs since the pandemic in 2020. The October figure alone also represented a 183% spike from September, and the volume of companies announcing cuts rose to nearly 450, up from under 400 the month before. Typically, companies avoid layoffs in the fourth quarter to sidestep reputational risks around the holiday season. "This is the highest total for October in over 20 years," Challenger said, noting that, like in 2003, a disruptive technology is reshaping the workforce -- this time, it's AI. AI Adoption And Automation Hit Hard The technology sector led the pack in job cuts for October, with 33,281 layoffs -- up from just 5,639 in September. Year-to-date, tech companies have cut 141,159 jobs, up 17% from the same time last year. But the most dramatic rise came from warehousing, which announced 47,878 cuts in October alone, reflecting a staggering 378% year-over-year increase. Although not cited in the Challenger report, last month Amazon.com Inc. (NASDAQ:AMZN) announced plans to cut roughly 14,000 corporate jobs while doubling down on its AI spending. Pandemic-era overcapacity and AI-powered automation appear to be driving the surge. Other sectors under pressure include: Retail, with 88,664 job cuts this year, up 145% Consumer products, with 41,033 cuts, up 21% Services, up 62% to 63,580 Media, up 26% to 16,680 The non-profit sector has also been heavily affected, with 27,651 job cuts this year -- a 419% increase -- driven by federal funding shortfalls linked to the so-called "DOGE Impact", a major reason behind this year's government-related job losses. Hiring Hits 14-Year Low While layoffs have surged, hiring plans are running dry. Employers have announced just 488,077 new hires so far in 2025, down 35% from the same period in 2024 and the lowest total since 2011. Seasonal hiring has also slowed to a crawl. Only 372,520 seasonal positions have been announced through October this year, the weakest showing since Challenger began tracking in 2012. "Unless there's a surprise burst in November, we don't expect a strong seasonal hiring environment in 2025," Challenger said. What This Means For The Fed And Markets With labor market indicators pointing to a sharp deterioration -- and official data still delayed due to the shutdown -- the Federal Reserve faces increasing pressure to act. Futures markets are pricing in a 70% chance of a rate cut in December, which would mark the third consecutive reduction. For now, Wall Street is cheering the layoffs, viewing them as a path to higher margins and improved productivity through AI and automation. But if job cuts persist and the labor market continues to weaken, today's cost savings could quickly turn into tomorrow's demand slump. After all, if AI replaces the workers, who's left to buy the products? Read now: Earnings Are So Good It Hurts: Why This Market Rally Suddenly Feels Tired Image: Shutterstock AMZNAmazon.com Inc$245.27-1.97%OverviewMarket News and Data brought to you by Benzinga APIs

AI and Cost-Cutting Lead to 175% Yearly Jump in Layoffs | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's a 175% jump from October of 2024 and 183% higher than the 54,064 cuts announced in September of this year, per a Thursday (Nov. 6) report by outplacement and executive coaching company Challenger, Gray & Christmas. "October's pace of job cutting was much higher than average for the month," Andy Challenger, workplace expert and the company's chief revenue officer, said in a news release. "Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market." The report also notes that October's total is the highest for that month since October of 2023, which saw a surge of layoffs in the retail space because of acquisitions, and in telecommunications as cell phones became more popular. "Like in 2003, a disruptive technology is changing the landscape," said Challenger. "Over the last decade, companies have shied away from announcing layoffs in the fourth quarter, so it's surprising to see so many in October." He added the onset of social media has allowed workers to share their negative work experience, meaning the trend of announcing layoffs before the holidays faded away, "a practice that seemed particularly cruel." Among the companies cutting jobs last month was Amazon, which said it planned to eliminate up to 30,000 corporate roles. The report comes one day after the announcement of planned Senate legislation that would require major companies and federal agencies to report artificial intelligence-related layoffs, hires, job displacements, retraining and other impacts to the Labor Department. The bill would also require the DOL to compile data on AI-related job effects and publish a report to Congress and the public, according to a press release issued Wednesday (Nov. 5) by the bill's sponsors, Sens. Josh Hawley, R-Mo., and Mark Warner, D-Va. Meanwhile, research from the PYMNTS Intelligence report "Generation AI: Why Gen Z Bets Big and Boomers Hold Back" found that among people who use generative AI, 33% are worried that the technology might threaten people's jobs. That concern is most pronounced among Generation Z, with 38% of the gen AI users in that age bracket worried about the impact on employment. The report said Gen Z users tend to have -- or are looking for -- the types of entry-level jobs that the technology can most easily replace.

AI Drives 1 in 5 October Layoffs as Firms Cut Costs and Boost Automation | Investing.com UK

Within sectors, healthcare and retail trade have surprisingly low adoption rates. Information and technical services are at the top. As global labor arbitrage becomes less viable and access to cheap labor in emerging markets continues to narrow, businesses are increasingly turning to AI as a domestic solution for cost control and productivity gains. The recent spike in layoff announcements illustrates the pressure on businesses to curb costs, and it seems like businesses plan to increase AI adoption rates as they decrease headcount. AI tools now offer companies the ability to automate routine tasks, streamline operations, and reduce reliance on large payrolls -- without offshoring. From customer service bots to intelligent document processing and predictive analytics, AI is becoming the new workforce multiplier. In this environment, the competitive edge no longer comes from finding cheaper labor abroad, but from deploying smarter algorithms at home. The Ramp AI Index offers a new lens into how American businesses are adopting artificial intelligence, using actual spending data rather than just survey responses. Drawing from over 40,000 companies and billions in corporate transactions processed through Ramp's card and bill pay platform, the index provides a real-time, data-driven view of AI adoption across industries. Unlike surveys that rely on self-reported usage, the Ramp AI Index identifies AI adoption through verified transactions. When a business pays for an AI product or service -- detected via merchant names and line-item details on receipts and bills -- it's counted as an adopter. This method captures actual engagement with AI tools, offering a more accurate and timelier picture of how firms are integrating these technologies into their operations. While the Ramp AI Index provides a robust measure of paid AI adoption, it likely underestimates total usage. Many businesses experiment with free AI tools or allow employees to use personal accounts for work-related tasks, which don't show up in transaction data. Still, the index represents a major step forward in understanding how AI is reshaping the business landscape -- offering policymakers, investors, and analysts a clearer view of where and how AI is gaining traction. Source: LPL Research, Ramp Economics Lab 11/12/25 In recent months, small and medium-sized firms have slowed the pace of AI adoption, but probably not for long. In the months before the government shutdown, the corporate sector was developing the economic outlook. It's possible the temporary concerns about growth and inflation put a damper on adoption rates, but as the tailwinds to growth reemerge, we should expect renewed interest in protecting margins, preparing for expansion, and managing headcount through greater AI adoption. Source: LPL Research, Ramp Economics Lab 11/12/25 It's not surprising that the information and technical services sectors have high adoption rates, but the drop in adoption rates across sectors suggests some upside usage for several sectors. There's a growing number of AI products and services available, and as the ecosystem matures, these tools are becoming better aligned with the needs of businesses -- delivering real, measurable value. Not only are the offerings improving in quality, but they're also earning stronger customer loyalty, reflected in higher retention rates. At the same time, AI spending is increasingly being viewed as a core business expense. The question "What's your AI strategy?" is no longer just a buzzword, it's a serious expectation from investors, executives, and advisors who now see long-term investment in AI as essential to scaling operations and staying competitive.