Layoffs 2025: Companies have announced over 800,000 jobs cuts so far. There are 3 big reasons why

If you feel like you’ve seen nonstop headlines about job layoffs this year, you’re not imagining things.

A recent report from global outplacement and executive coaching firm Challenger, Gray & Christmas shows that through the end of July, U.S.-based employers have announced more than 800,000 job eliminations in 2025.

That’s the highest number of jobs lost through the same period since 2020, when the global pandemic saw more than 1.8 million jobs lost through the end of July.

What’s worse is that the total 806,383 jobs lost in the first seven months of 2025 far outstrips the number of jobs lost during the same period just a year earlier. In 2024, by the end of July, the United States had seen 460,530 job cuts. That means 2025 has seen 75% more job cuts this year than at the same point last year.

Even more alarming, the data reveals, is that the United States by July of this year has already surpassed the total job cuts it experienced in all of 2024. What’s behind these cuts? There are three primary drivers, based on company announcements.

DOGE

The report from Challenger, Gray & Christmas spotlights the three main drivers behind the majority of the job cuts so far in 2025. And if you’ve been paying attention to the headlines over the past seven months, these drivers will likely not surprise you.

The first driver is the “DOGE Impact,” according to the report.

Federal government spending cuts spearheaded by the Department of Government Efficiency, formerly controlled by Tesla CEO and billionaire Elon Musk, are responsible for the majority of job losses in 2025.

The impacts of DOGE’s cuts have been cited in 289,679 of the planned layoffs year-to-date so far. The report says these numbers include “direct reductions to the Federal workforce and its contractors.”

Additionally, there has also been what is called a “DOGE Downstream Impact” on jobs. This downstream impact results from DOGE funding cuts, which impact the funding of private nonprofits and other affiliated organizations.

Less funding means a reduced ability to retain workers. The DOGE Downstream Impact is said to have driven U.S.-based employers to cut another 13,056 jobs.

Tariffs and market conditions

The second driver behind the job cuts is market and economic conditions. While this uncertainty encompasses a range of factors, one of the most significant is the economic uncertainty caused by President Trump’s tariffs. The tariffs are raising prices for U.S. companies that import goods and parts needed to run their business, which impacts their bottom line.

Additionally, the ever-changing tariff landscape brings much uncertainty with it—companies can’t be sure if an announced tariff will remain the same, go up, or go down. This makes it hard for companies to plan and budget for the future.

As the report notes, retailers have been hit particularly hard. In July alone, 80,487 retail jobs were lost. “Retailers are being impacted by tariffs, inflation, and ongoing economic uncertainty causing layoffs and store closures,” the report states.

The report also says that market and economic conditions have led to 171,083 cuts through the end of July so far this year.

Artificial Intelligence

The final big driver of job cuts in 2025 so far involves AI. The report says that technological updates, including AI implementation and automation, are behind 20,219 lost jobs in 2025.

Another 10,375 job losses were also “explicitly attributed” to artificial intelligence, which the report says suggests “a significant acceleration in AI-related restructuring.”

As far as the tech industry itself, the sector has seen 89,251 jobs lost through July in 2025—a 36% increase from the same period in 2024. When it comes to AI, the report notes that the tech sector “is being reshaped by the advancement of artificial intelligence.”

The top 5 industries hit hardest by job cuts

Challenger, Gray & Christmas’s report says that so far in 2025, the top five industries being hit hardest by job cuts are:

• Government: 292,294 jobs lost
• Technology: 89,251 jobs lost
• Retail: 80,487 jobs lost
• Services: 53,438 jobs lost
• Warehousing: 38,943 jobs lost

As Fast Company has previously reported, among individual tech companies, the most prominent ones with significant layoffs in 2025 so far include Intel, Microsoft, Panasonic, HP, Meta, and Amazon.