US companies are cutting jobs at the fastest pace in over two decades, with artificial intelligence and cost pressures triggering deep restructuring across industries.
Data from Challenger, Gray & Christmas Inc. showed that 153,074 jobs were cut in October, nearly triple the number a year ago.
It marked the highest total for any October since 2003, when the rise of mobile technology also disrupted labour markets.
The technology and warehousing sectors led the cuts as firms adjusted to slowing demand and higher operating expenses.
Source: Challenger, Gray & Christmas Inc.
AI adoption accelerates workforce transformation
The surge in layoffs reflects how AI is fundamentally reshaping employment.
Companies that expanded rapidly during the pandemic are now consolidating, replacing redundant roles, and automating functions to improve efficiency.
Challenger noted that weaker consumer and corporate spending, coupled with rising costs, have pushed many employers to tighten budgets and freeze hiring.
Those affected are struggling to find new roles quickly, suggesting that the labour market is loosening.
Automation is increasingly replacing middle-management and logistics jobs, while reshaping hiring strategies in finance, retail, and customer service.
The trend signals a shift toward skill-based employment driven by data analytics and AI integration.
Over one million jobs lost in 2024
Job cuts in the US have already surpassed one million this year, the highest level since the pandemic. During the same period, companies announced the fewest hiring plans since 2011, showing how cautious employers have become.
Seasonal hiring through October is at its weakest since 2012, highlighting reduced appetite for temporary workers ahead of the holidays.
While lower interest rates later in the year could revive confidence, the report suggests that large-scale recruitment remains unlikely in early 2025.
Employers are prioritising digital transformation and efficiency rather than workforce expansion. The result is a job market that continues to cool even as headline payroll data remains stable.
Major employers slash headcount
Layoff announcements from major companies continue to dominate headlines. Amazon, Meta Platforms, Target, and Paramount Skydance were among those that trimmed staff in October.
The trend underscores widespread caution in both consumer and entertainment industries as spending patterns shift.
Mounting evidence of broad-based layoffs indicates that job security is weakening even as official unemployment remains low.
The divergence highlights a structural shift where AI and automation replace traditional job creation cycles.
Payroll growth slows despite October rebound
Despite layoffs, ADP Research data showed that payrolls at US companies rose by 42,000 in October, following two consecutive monthly declines.
The modest rebound points to stabilisation but still reflects weaker labour demand overall. Economists are relying more on private-sector data to assess employment trends amid potential government reporting delays.
Challenger’s findings confirm that the combination of AI adoption, slower spending, and cost control is reshaping the American labour force.
With over one million jobs already lost and hiring plans at decade-low levels, companies appear to be preparing for a leaner, more automated economy in 2025.
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