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Employment consultancy Challenger, Gray & Christmas reported Thursday that layoffs surged in August to the highest level in 15 years, while year-to-date hiring hit a record low.
The total number of layoffs announced this month was 75,891, a 193% increase from July. While the total was only 1% higher than the same month in 2023, it was the highest August figure since 2009 as the economy was still emerging from the worst of the global financial crisis.
On the hiring front, companies said they added just 6,101 new employees, an increase of nearly 2,500 since July but a drop of more than 21% from August 2023. The lowest total since 2005.
“The surge in layoffs in August reflects increased economic uncertainty and changing market dynamics,” said Andrew Challenger, the company’s senior vice president. “Companies are facing a variety of pressures, from rising operating costs to concerns about Concerns about a potential economic slowdown are leading them to make difficult decisions about workforce management.”
Although the U.S. economy added 1.4 million nonfarm payrolls this year, the report comes amid growing concerns that the labor market is weakening. The market expects that even if inflation is above the central bank’s 2% target, weak employment conditions will still prompt the Federal Reserve to cut interest rates later this month.
Thursday’s report showed the largest increase in planned layoffs was in the technology sector, with companies announcing 41,829 layoffs, the most in 20 months.
“The labor market overall is softening,” Challenger said.
Companies announcing layoffs most often cited cost cutting and economic conditions as reasons, although artificial intelligence was also included in the layoff list for the first time since April.
Challenger’s layoff data is somewhat out of sync with government reports, which have shown a slight uptick in initial jobless claims in recent weeks but do not reflect a major escalation.
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