AI wreaks havoc on US jobs with two-decade high 150K cut in October – bringing 2025 total to 1M: report

US employers axed about 153,000 workers last month — making it the worst October for layoffs in two decades and bringing total firings for the year so far to over 1 million, according to a new report that noted many companies blamed the latest layoffs on AI.

The last time the US saw a worse October in terms of firings was in 2003, when 171,874 people were laid off.

As in the aughts, the latest layoff numbers came amid a time of tech-driven realignment for the economy. Back then, the issue was changes in the telecom industry sparked by the rise of cell phones, experts say; today, it’s the advent of AI and automating tasks once done by humans.

Companies cited artificial intelligence in 31,039 of the October layoffs — second only to general cost-cutting — according to the report Challenger, Gray & Christmas released Thursday.

“Like in 2003, a disruptive technology is changing the landscape,” said Andy Challenger, the firm’s chief revenue officer.

AI was explicitly blamed for relatively few of the total job cuts so far this year — just 48,414 of them, according to the data.

October’s 153,074 job cuts marked a 183% spike from September — when 54,064 positions were slashed — and a 175% jump from the same month a year ago, Challenger, Gray & Christmas found.

Analysts and businesses having been using the firm’s reports, which usually draw little notice, while official jobs data has stalled because of the government shutdown.

Through the first 10 months of 2025, announced layoffs topped 1.09 million — a 65% increase from the 664,839 job cuts last year and the highest total since 2020, when pandemic shutdowns sent pink slips soaring.

“Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending and rising costs drive belt-tightening and hiring freezes,” said Challenger.

The data shows technology and warehousing companies led October’s cuts.

Tech firms announced 33,281 layoffs, up sharply from 5,639 the prior month, while warehousing firms axed 47,878 jobs — a surge driven by automation and lingering overcapacity from pandemic-era expansion.

For the year, the tech industry has slashed 141,159 jobs so far — up 17% from the 120,470 that were announced through the same period in 2024.

The retail sector also remains under pressure, with 88,664 job cuts so far this year, up 145% from 2024, as chains face weaker discretionary spending and ongoing store closures.

“Over the last decade, companies have shied away from announcing layoffs in the fourth quarter, so it’s surprising to see so many in October,” said Challenger.

Warehousing, services, and consumer product firms also joined the retrenchment, while media and nonprofit organizations reported mounting losses tied to automation and reduced government funding.

Challenger said nonprofits have announced 27,651 job cuts this year — up more than 400% — while the media industry logged 16,680, a 26% increase.

Overall, companies cited cost-cutting in 50,437 October layoffs, followed by artificial intelligence, market conditions and facility closures.

The layoffs seem unlikely to stop anytime soon.

Amazon, Target, Paramount Skydance and Starbucks have each moved to cut hundreds or thousands of positions, underscoring the breadth of the corporate pullback heading into the holidays.

Amazon said last week it will eliminate about 14,000 corporate roles, part of a reorganization to “further reduce bureaucracy” and shift resources toward artificial intelligence.

At Target, incoming CEO Michael Fiddelke announced the company’s first major layoffs in a decade, cutting 1,800 corporate jobs — roughly 8% of its headquarters staff — as the retailer struggles with a sales slump and aims to “simplify how we work.”

UPS recently announced it would lay off 48,000 workers as part of a sweeping cost-cutting initiative.

In Hollywood, Paramount Skydance began cutting about 2,000 positions, or 10% of its workforce, following its merger approval earlier this year.

Starbucks filed notice to Washington state regulators that it will lay off 974 employees in Seattle and Kent starting Dec. 5.

The non-retail layoffs follow earlier cuts across Washington State as CEO Brian Niccol restructures the company after a post-pandemic downturn.

Even as layoffs accelerate, hiring plans have slowed dramatically.

Employers have announced 488,077 planned hires through October — down 35% from last year and the lowest year-to-date figure since 2011.

Seasonal hiring has also cratered, with just 372,520 positions announced so far, the weakest pre-holiday total since Challenger began tracking the figure in 2012.

“At a time when job creation is at its lowest point in years, the optics of announcing layoffs in the fourth quarter are particularly unfavorable,” Challenger said.

“Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”