Jul 31 Summer Lull Ends: July 2025 Job Cut Announcements Spike to 62,075, Tech, AI & Tariffs Increasingly Blamed
U.S.-based employers announced 62,075 job cuts in July, up 29% from June’s 47,999. It is up 140% from 25,885 announced in the same month last year, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas.
July’s job cuts are well above average for this month since the pandemic. From 2021 to 2024, job cut announcements in July averaged 23,584. Considering the past decade (2015-2025), last month’s announced cuts are still above the average of 60,398.
So far this year, companies have announced 806,383 job cuts, the highest YTD since 2020 when 1,847,696 were announced. It is up 75% from the 460,530 job cuts announced through the first seven months of last year and is up 6% from the 2024 full year total of 761,358.
“We are seeing the Federal budget cuts implemented by DOGE impact non-profits and healthcare in addition to the government. AI was cited for over 10,000 cuts last month, and tariff concerns have impacted nearly 6,000 jobs this year,” said Andrew Challenger, Senior Vice President and labor expert for Challenger, Gray & Christmas.
WHICH INDUSTRIES ARE CUTTING THE MOST IN 2025?
Government
In July, Government entities announced 3,666 job cuts, slightly down from the 3,801 cuts announced in June. So far in 2025, this sector has announced 292,294 job cuts, the highest in any sector, primarily due to reductions at the Federal level. Some of these cuts remain in legal limbo, though courts have allowed many to go through.
Technology
Technology is the leading private sector in job cuts, with 89,251 in 2025, a 36% increase from the 65,863 cuts tracked through July 2024. The industry is being reshaped by the advancement of artificial intelligence and ongoing uncertainty surrounding work visas, which have contributed to workforce reductions.
Retail
Retail announced 80,487 job cuts through July, up 249% from the 23,077 cuts announced during the same period last year. Retailers are being impacted by tariffs, inflation, and ongoing economic uncertainty causing layoffs and store closures. Further declines in consumer spending could trigger additional losses.
Non-Profits
Non-Profits continue to face mounting challenges from reductions in Federal funding, rising operational costs, and persistent economic uncertainty. These organizations have announced 17,826 job cuts so far in 2025, a 413% increase from the 3,477 announced through July last year. Much of this surge is tied to federal budget cuts affecting both direct service providers and related support structures.
Automotive
In July, Auto makers announced 4,975 job cuts, primarily citing tariffs. This is most job cut activity in a single month since November 2024 when 11,506 job cuts were announced. The Automotive sector has cut 16,883 jobs through July 2025, down 31% from the 24,434 cuts announced during the same period last year. The industry remains vulnerable to fluctuations in production demand, supply chain disruptions, and increased operational costs.
WHY ARE COMPANIES CUTTING IN 2025?
“DOGE Impact” remains the leading reason for job cut announcements in 2025, cited in 289,679 planned layoffs so far this year. This includes direct reductions to the Federal workforce and its contractors. An additional 13,056 cuts have been attributed to DOGE Downstream Impact, such as the loss of funding to private non-profits and affiliated organizations.
Market and Economic Conditions are the second-most cited reason for workforce reductions, responsible for 171,083 cuts year to date. This reflects a continued response to economic uncertainty, inflation, and shifting demand across multiple sectors.
Closings of stores, units, or plants have led to 120,226 layoffs so far this year, while Restructuring efforts have resulted in 66,879 job cuts. Bankruptcies accounted for another 35,641 layoffs.
Technological Updates, including automation and AI implementation, have led to 20,219 job cuts in 2025. Another 10,375 were explicitly attributed to Artificial Intelligence, suggesting a significant acceleration in AI-related restructuring.
Other notable drivers of cuts include Cost-Cutting (19,977), Contract Losses (9,591), and Financial Losses (4,909). A total of 19,772 cuts were announced without a specified reason.
WHERE ARE JOB CUTS OCCURING THIS YEAR?
Challenger tracks job cuts by company headquarters location, unless an announcement specifies the geographic location of the layoffs.
So far in 2025, the East region has experienced the largest year-over-year increase in job cuts, rising 219% from 136,149 in 2024 to 434,385. This dramatic surge is primarily driven by major reductions at Federal agencies which are counted in Washington, D.C. New Jersey jumped from 5,776 to 26,695 YTD (a 362% increase), and New York rose 43% from 53,053 to 76,038. Meanwhile, several states saw steep declines: Connecticut fell 82%, from 7,986 to 1,440; Vermont dropped 52%; and Massachusetts declined 33%, but it is likely Federal reductions occurred in these states as well.
The Midwest region saw a modest 8.7% increase in job cuts, from 82,279 in 2024 to 89,444 in 2025. Trends varied significantly by state. Ohio saw the largest increase, more than doubling from 18,802 to 37,938 (up 102%), while Nebraska jumped over 500% from 753 to 4,869. On the other hand, Illinois fell 11%, Indiana declined 68%, and Wisconsin dropped 69%.
In the West region, job cuts rose 11%, from 182,290 in 2024 to 202,686 in 2025. California led the region with 114,676 cuts this year, up 50% from 76,639 last year. Arizona also posted a 52% increase. However, some states saw major declines: Nevada and Oregon each dropped by roughly 79% and 61% respectively, while Utah fell 44%, and Hawaii dropped 52%. Washington saw a 48% increase, rising from 17,887 to 26,524.
The South region reported a 34% increase in job cuts, rising from 59,812 in 2024 to 79,868 in 2025. Georgia experienced one of the sharpest increases, rising 72% from 16,298 to 28,068. Florida also saw a notable jump, with cuts increasing 70%, and Alabama more than doubled, climbing from 2,702 to 6,530. By contrast, North Carolina, South Carolina, Tennessee, and Virginia all saw small year-over-year declines
HIRING PLANS IN 2025
Hiring announcements remain well below pre-pandemic levels, with U.S.-based employers planning to add 86,132 jobs through July 2025, compared to 73,596 through the same period in 2024. The Entertainment & Leisure sector accounts for nearly a third of all hiring plans so far this year, with 28,190 new positions announced, potentially reflecting a rebound in seasonal and service-related roles. Insurance employers planned 12,800 hires, compared to none last year, and Automotive, announced 6,161 new jobs, up from 4,122 in 2024.
Technology hiring continues to decline, with companies in the sector announcing just 5,510 new jobs in 2025, down 58% from 13,263 in the same period last year. Other sectors showing significant year-over-year drops include Construction (down 76%), Industrial Goods (down 37%), and Energy, which fell by more than 90% from 11,327 hires in 2024 to 1,070 this year.