Since the beginning of COVID-19, the number of layoffs that have occurred across the United States has reached its greatest peak. It was reported by the company Challenger, Gray & Christmas that there were around 744,000 jobs that were eliminated in the first half of the year 2025.
The reductions in government jobs, the uncertain economic times, and the difficulties in certain trades are the causes of this increase, which is the largest since the year 2020.
What are the reasons behind these layoffs?
Here are the main reasons for the big increase in job cuts:
Government Cuts (DOGE)
During the year 2025, the Department of Government Efficiency (DOGE), which is directed by Elon Musk and supported by the government of Donald Trump, will be the most significant contributor. Nearly 287,000 positions were eliminated, the majority of which were from large government departments such as the Department of Health and Human Services, the Department of Education, USAID, and other organizations.
The “deferred resignation” plan and its effects on organizations and contractors that get funding from the government resulted in the loss of a significant number of additional employment.
Tariffs and Trade Rules
This year, at least 2,000 jobs have been eliminated as a direct result of the implementation of new tariffs on imports from other countries. Businesses and shops have, quite rightly, felt this, since the escalating prices and difficulties in supply chains are having a negative impact on their earnings.
Economic slump and shaky markets
Although the overall picture remains relatively unchanged, with unemployment rates standing at 4.2%, businesses are getting ready for a slowdown. As a result of the general economic difficulties, about 154,000 people have been laid off as a result of unstable financial markets and a decline in the trust of customers.
Problems in retail and tech
This represents a 255% increase from the previous year, when stores lost roughly 80,000 employment. This is exacerbated by a number of factors, including the closing of stores, increased costs, and shifting preferences among consumers. There have been approximately 76,000 layoffs in the technology sector, with reasons including the usage of artificial intelligence, automation, and visa concerns.
Bankruptcies and restructuring
Some businesses, such as Del Monte, At Home, and 23andMe, have filed for bankruptcy, while others are in the process of reorganizing their operations. Several more jobs in a variety of industries have been eliminated as a result of these shifts.
Which areas and economic sectors are going to be impacted?
- Government: 288,628 job cuts, many still not settled
- Stores: 79,865 job cuts, the most in private trades
- Tech: 76,214 job cuts, 27% more than last year
- Nonprofitable companies: 16,930 job cuts, up 407% from last year
- Media: 4,752 job cuts, less than 2024 but still a lot
The greatest increases have been noted in regions such as the East and Southeast, with Washington, District of Columbia alone experiencing approximately 290,000 reductions as a result of reductions made by federal agencies.
Do you have any positive news?
Although there have been a significant number of layoffs, employment has not completely ceased in the United States. When compared to the previous year, employers have stated that they want to hire 82,932 workers by the month of June. However, this number is far lower than it was before the pandemic, and recruiting continues to be slow despite the uncertain times that lie ahead.
There is a possibility that additional people will be laid off in the latter part of the year if people continue to reduce their expenditure and tariffs remain unchanged. The next report on jobs that will be released by the Department of Labor will provide additional information regarding the stability of jobs and whether or not more difficult times are on the horizon.
