Below Wall Street estimates, not only did wages rise 73,000 times in July, but the revisions also indicate that the spring growth was below 20,000 months in two consecutive months. As the labor force shrinks, the unemployment rate has dropped from 4.1% to 4.2%. In this slow cocktail, there are new data showing a significant surge in layoffs in July.
Gray & Christmas’s Employment Consulting Challenger Challenger publishes “Layouts” reports every month, while the July edition can be read some. According to dataEmployers across the U.S. announced 62,075 job cuts last month, up 29% from June, but the alarming rate in July 2024 increased by 140%, while the typical midsummer temporary cuts reduced workforce layoffs. Nearly half (49%) of these cuts are related to artificial intelligence (AI) and “technology updates.”
The report said the cuts “above averages this month since the pandemic”, one of the declines in July in the past decade, demonstrating deep, technology-oriented changes spreading in the labor market. From a perspective, the average number of layoffs announced from July 2021 to July 2024 was only 23,584. Even in the broader decade-average average of 60,398, the total this year is higher.
Headlines, including wealthlinking layoffs to the increase in artificial intelligence (AI) in enterprises, challenger Gray partially agreed. The impact of cutting government employment is greater because of the Department of Government Efficiency (DOGE) and Elon Musk takes an vague consulting role. Of course, a large part of the layoffs is to encourage increased AI adoption within the government. “In addition to the government, we are also seeing federal budget cuts implemented by Doge Impact nonprofits and healthcare,” said Andrew Challenger, senior vice president and labor expert at Gray & Christmas Challenger. “Last month, AI was cited more than 10,000 times, and tariff concerns affected nearly 6,000 jobs this year.”
AI effect
Exceed In July, more than 10,000 jobs were phased out due to AI adoption, with an additional 20,219 layoffs attributed to “technology updates,” including automation and new software workflows. Challenger Gray said this shows that “there is a big acceleration in AI-related restructuring.”
While AI’s influence has dominated the headlines, federal budget cuts, known as “the impact of the doorman”, are another pillar that drives the wave of layoffs this year. Government departments announced 292,294 positions this year, most at the federal level, with the volume of publicity in the courts drastically. These not only affect the direct role of the government, but also nonprofits and health care, with additional layoffs in total through downstream funding losses.
Other economic stressors remain: markets and economic conditions account for 171,083 cuts, inflation and demand are weak, shops and factories have been closed (120,226 layoffs), while restructuring and bankruptcy contributed 66,879 and 35,641 cuts, respectively.
Places where layoffs storms hit
Cuts were distributed unevenly across the United States, with the East Coast growing the biggest year-on-year, 219%, stimulated by a decrease in federal agencies in Washington, D.C., and a sharp jump in states such as New Jersey (+362%) and New York (+43%). Layouts in western California were also burned by 114,676 layoffs (+50%). In the South, layoffs generally rose 34%, with Georgia and Florida peaking more than 70%.
The tech industry accounts for private sector losses, reducing 89,251 cuts per year (a 36% increase from last year), reflecting the disruptive role of AI and ongoing work visa uncertainty. So far, the retail industry announced 80,487 layoffs in 2025, up 249% from a year ago as inflation and tariffs drove more stores to shrink or close their doors. Nonprofit job cuts grew 413%, with increasing operating costs exacerbating losses from federal support. While the auto industry’s cuts at the beginning of the year fell 31% from 2024, in July alone, nearly 5,000 jobs were created due to new tariffs, the most affected month since the second half of last year.
The announced recruitment plan has little relief: until July, U.S. employers planned 86,132 new jobs; that has been well below pre-pandemic levels. Technology recruitment continues to decline, down 58% year-on-year, with only 5,510 technical positions announced in 2025 so far.
For this story, wealth Use the generated AI to help with the initial draft. The editor verified the accuracy of the information before publishing.