Job Market Faces Turbulence as Major Layoffs Occur
Throughout much of 2025, the job market was characterized by economists as a period of “no hire, no fire.” During this phase, job seekers encountered limited opportunities, but existing employees enjoyed a semblance of security.
However, labor analysts caution that this delicate equilibrium may be on the brink of transformation, as sweeping layoffs at prominent firms such as Amazon and UPS hint at a potential inflection point for the labor landscape.
On Tuesday, Amazon disclosed plans to eliminate 14,000 positions, attributing this move to a transition towards artificial intelligence. Concurrently, UPS announced a significant reduction of its workforce, having slashed 48,000 jobs compared to a year prior.
Furthermore, Paramount Skydance, the parent company of CBS News, revealed on Wednesday its intention to downsize as part of an ongoing cost-cutting initiative within the entertainment sector.
Additionally, Target informed a Minnesota state employment agency that, come January, it would lay off over 800 workers as part of a comprehensive restructuring plan.
This announcement followed its disclosure last week of 1,800 cuts to corporate positions, representing an approximate 8% reduction in its global workforce.
These mass layoffs coincide with increased scrutiny from the Federal Reserve regarding signs of labor market frailty.
Fed Chair Jerome Powell, in his remarks last month, mentioned concerns pertaining to decelerated hiring, coinciding with the central bank’s inaugural interest rate reduction for 2025. Analysts opine that the announcements from Amazon and UPS substantiate the Fed’s trepidations.
“Indubitably, this represents a shift, signaling that the ‘no hire, no fire’ paradigm is likely a relic of the past,” stated John Challenger, CEO of the outplacement firm Challenger, Gray & Christmas, in an interview with CBS News.
“These layoffs are substantial in nature, resembling those typically witnessed during periods of significant economic transition,” he elaborated.
Escalating Layoffs
Even preceding Tuesday’s cuts, layoffs had exhibited an upward trajectory, as evidenced by data from Challenger, Gray & Christmas. U.S. employers had dispensed with nearly 950,000 jobs from January to September of this year, marking the highest number of layoffs since 2020.
Official federal assessments of the labor market have been halted due to the ongoing government shutdown. Consequently, the Fed will convene for its forthcoming interest rate decision tomorrow, Oct. 29, devoid of insights regarding September’s hiring trends.
Recent months have revealed a stark deceleration in job growth, with monthly payroll increases averaging approximately 27,000 between May and August—a decline from an average of nearly 123,000 monthly gains during the January to April timeframe.
According to the ADP National Employment Report released on Oct. 1, private sector payrolls contracted by 32,000 jobs in September. Simultaneously, evidence suggests layoffs have intensified in October, according to Grace Zwemmer, an associate economist with Oxford Economics.
State-level data also illuminates that jobless claims among federal employees exceeded 10,000 in the week ending Oct. 18, indicating the adverse effects of congressional gridlock, the investment advisory firm noted in a separate report.
Notably, although the nation’s unemployment rate remains historically low, having edged up to 4.3% in August from 4.2% in July, experts express that the latest spate of layoffs is unlikely to precipitate a dramatic surge in joblessness.
“When analyzing the magnitude of these announcements in relation to the broader economy and current unemployment claims data, we do not foresee a scale of impact that would result in a significant uptick in the unemployment rate,” remarked Andy Stettner, director of economy and jobs at the left-leaning Century Foundation.
However, he cautioned, “These substantial corporate downsizings are occurring in a context of dwindling job availability.”
This reality suggests that individuals displaced from their positions may grapple with challenges in securing new employment. Projections indicate that the cohort of long-term unemployed—those seeking work for over six months—could rise further from August’s figure of nearly 2 million, the highest level recorded since 2022.
Factors Influencing the Labor Market
Experts dictate that a confluence of elements is driving employers to enact job cuts, ranging from advanced artificial intelligence to economic unpredictability.
Earlier in the year, Amazon CEO Andy Jassy noted that the company’s investment in AI capabilities would enable it to streamline its human workforce while enhancing operational efficiency.
“Amazon has distinctly highlighted its focus on robotics, AI, and emerging technologies—emphasizing innovation as a catalyst for job transformation,” Challenger observed.
Notably, approximately one-quarter of technology sector employees reported experiencing job eliminations or layoffs attributable to AI integration in the past two years, according to a recent study conducted by the career site Indeed.
Other companies, on the other hand, are either hesitating to hire or are enacting layoffs for disparate reasons. UPS cited the ramifications of tariffs instituted under the Trump administration, along with shipping declines from Amazon—its primary client—as pivotal factors impacting its operations.
The e-commerce giant has increasingly developed its own delivery network, reducing its reliance on UPS.
On Monday, the children’s apparel company Carter’s announced the elimination of 300 positions, equating to 15% of its workforce, alongside plans to shutter 150 stores over the forthcoming three years, citing heightened costs linked to tariffs imposed by the federal government.
The Trump administration has maintained that its tariff policies are designed to bolster domestic manufacturing and elevate local production as businesses transition operations back to the United States.
Meanwhile, recent CBS News polling indicates a growing pessimism among Americans regarding the job market. Approximately 52% of respondents described the labor landscape as “bad,” reflecting a seven-point increase since April.
“We are entering an era characterized by potentially precarious job security,” Challenger concluded.
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