Layoffs surged 193% in August, while hiring hit a record low, reflecting market pressures
Job cuts surged to 75,891, a 193 percent increase from July. Although this figure is just 1 percent higher than August 2023, it is the highest number recorded for August since 2009, when the economy was still recovering from the global financial crisis.
Hiring numbers offered little relief, with companies adding 6,101 new workers in August—an increase of nearly 2,500 from July but a drop of over 21 percent compared to August 2023. The year-to-date total of nearly 80,000 new hires marks the lowest level since records began in 2005.
Andrew Challenger, senior vice president of Challenger, Gray & Christmas, commented on the situation, noting that “August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics.”
He pointed out that rising operational costs and concerns over a potential economic downturn are forcing companies to make tough decisions about workforce management.
This report adds to concerns about a softening labour market, despite the US economy adding 1.4 million nonfarm payroll jobs so far this year. Payroll processing firm ADP reported that private companies added only 99,000 workers in August, the smallest increase since January 2021.
Markets are now anticipating that the weakening jobs data could prompt the Federal Reserve to lower interest rates, even though inflation remains above the Fed’s 2 percent target.
Notably, the Challenger layoffs data contrasts with government reports, which indicate a modest rise in unemployment claims. Initial jobless claims totalled 227,000 for the week ending August 31, a slight decrease from the previous week.
The largest rise in planned layoffs came from the technology sector, where companies announced 41,829 job cuts—the most in 20 months.
Most companies cited cost-cutting measures and economic challenges, while artificial intelligence was mentioned as a reason for job cuts for the first time since April.
“The labour market overall is softening,” said Andrew Challenger, reflecting the growing pressures on companies as they navigate economic uncertainties.
