Key Takeaways
- Job cuts announced by U.S. employers so far this year reached their highest levels since 2020, a new report showed.
- The Department of Government Efficiency and weakening economic conditions are tied to more than half of the almost 700,000 job cuts announced this year.
- The report comes as private sector employment has slowed and companies like Procter & Gamble, Microsoft, and Walmart have all announced job cuts.
Government spending cuts and economic uncertainty are helping push employers to lay off workers at the fastest pace since the pandemic.
U.S.-based employers have announced 696,309 job cuts so far this year, according to the monthly report from business and executive coaching firm Challenger, Gray & Christmas. It’s the highest level of job cuts since pandemic-driven layoffs left more than 1.4 million people out of work during the first five months of 2020.
Announced layoffs in May were actually lower than April levels, which were driven by Department of Government Efficiency (DOGE) cuts, but were 47% higher than the job cuts announced in May 2024.
“Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforces. Companies are spending less, slowing hiring, and sending layoff notices,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas.
However, DOGE accounted for over a third of the layoffs through direct reductions in federal government staff and funding or the “downstream impact” of organizations cutting jobs because they lost government money.
The report tracks published announcements of job cuts and reflects a string of major companies that have recently reported layoffs.
Procter & Gamble (PG) was the latest company to announce layoffs, with a company executive revealing this week that the conglomerate planned to cut 7,000 non-manufacturing jobs over the next two years. Other recent layoff announcements have come from Microsoft (MSFT), Morgan Stanley (MS), Walmart (WMT) and CrowdStrike (CRWD).
Because it only tracks published reports, most economists, analysts, and investors don’t follow it closely. Many will look to Friday’s official government jobs report for a more comprehensive measure of the labor market, as it gathers information directly from businesses and workers.
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