October 2025 may very well be remembered as a turning point in the U.S. labor market. According to Challenger, Gray & Christmas, employers announced approximately 153,000 job cuts last month, marking the highest October total since 2003 and the largest single-month wave of layoffs in the fourth quarter since 2008. That represents a 175% increase from October 2024 and a staggering 183% jump from September. Year-to-date, layoffs have surpassed 1.09 million, up 65% from last year, making 2025 the worst year for job cuts since the pandemic era of 2020. With mass layoffs in sharp focus, there are a variety of employment law issues for employers to navigate.
Why Are Layoffs Surging?
Several factors are converging to create this historic spike. Companies are aggressively reducing expenses amid softening consumer demand and rising operational costs. Cost-cutting was cited as the top reason for October layoffs, accounting for over 50,000 job cuts. In addition, artificial intelligence (AI) is continuing to reshape the workforce. Employers attributed approximately 31,000 layoffs to AI-related restructuring in October alone, contributing to more than 48,000 cuts this year. Perhaps not surprisingly, the technology sector was hit the hardest, with approximately 33,000 job cuts in October, and approximately 141,000 in 2025 (an increase of 17% from the same period in 2024).
Legal Considerations for Employers
As employers are planning for and implementing mass restructurings, there are...
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