US job market under pressure as layoffs continue and hiring slows down: Challenger report

The US-based companies recorded their second-highest layoffs in the second quarter of 2025 with 247,256 job cuts, since the pandemic-era reductions announced in 2020, according to a report published on July 2 by outplacement firm Challenger, Gray & Christmas.So far this year, companies have announced 744,308 job cuts, the highest layoffs year-to-date (YTD) since 2020 when employers reduced staffing by 1,585,047. Outside of 2020, it is the highest YTD since 896,675 cuts were announced in the first six months of 2009.
For June, the jobs cuts announced by employers stood at 47,999, down 2% from 48,786 announced in the same month last year. On a sequential basis, the job cuts are down 49% from May’s 93,816 layoffs.

“The bulk of companies cited economic conditions last month. We saw some DOGE activity and have tracked over 2,000 jobs directly attributed to tariffs this year, but for the most part it was a quiet June,” said Andrew Challenger, Senior Vice President and labour expert for Challenger, Gray & Christmas.Industry-wise, the retail sector has cut most private-sector jobs this year with 79,865 redundancies, up 255% from 22,467 job cuts announced in the first half of 2024. Meanwhile, a total of 288,628 government sector jobs were made redundant in 2025, primarily in the Federal Government, and many of which are in legal limbo.

Even non-profit sector job cuts have risen by a whopping 407% to 16,930 from 3,342 cuts announced during the same period in 2024. Non-profits are being hit hard by losses in federal government funding, rising costs, and ongoing economic uncertainty, the report added.

“DOGE Impact” remains the leading reason for job cut announcements in 2025, cited in 286,679 planned layoffs so far this year. This includes direct reductions to the Federal workforce and its contractors, the update said.

Hiring plans

In June, US employers announced 82,932 potential hires, which is 19% more than the hires announced in the same period last year. While this represents growth, hiring activity remains historically low, particularly when compared to the surge in hiring during the post-pandemic recovery years, the report added.

The highest monthly hiring announcement in 2025 occurred in February, with 34,580 hires. Since then, numbers have declined, with just 3,191 hires announced in June, the lowest of the year so far.

“Hiring announcements in 2025 suggest a cautious but stabilising labour market. While companies are clearly adding workers at a higher rate than in 2024, the restraint shown relative to previous years indicates continued uncertainty around costs, automation, and the broader economic outlook. Without a strong economic driver, hiring may remain measured through the rest of the year,” said Challenger.