The cold air is forcing its way in! The number of layoffs in the United States in October reached a 20-year high for the same period, with the impact of AI and cost reduction being the main reasons.

According to data from the employment consulting firm Challenger, Gray & Christmas, the number of layoffs announced by American companies in October reached the highest level in over 20 years. The reshaping of industries by artificial intelligence and cost reduction have accelerated and become the core drive of this wave of layoffs. Pressure on the job market In October, American companies announced layoffs of 153,074 people, almost three times the number announced during the same period last year, an increase of 175% from the 55,597 layoffs announced in October 2024, and an increase of 183% from the 54,064 layoffs announced just a month ago. These layoffs were mainly concentrated in the technology and warehousing/logistics industries. This is the highest number of monthly layoffs in October since the industry's transformation sparked by the popularity of mobile phones in 2003. Andy Challenger, Chief Revenue Officer of the company, pointed out that some industries are readjusting their over-hiring during the pandemic, but the widespread application of AI technology, weak consumer and business spending, and rising costs have collectively led companies to take austerity measures and freeze hiring. As of October, the total number of layoffs in the United States this year has exceeded one million, the highest level since the pandemic. At the same time, companies' hiring plans have fallen to the lowest level since 2011, and seasonal hiring is at its lowest point since Challenger began tracking data in 2012. Meanwhile, re-employment difficulties are worsening. Workers who have been laid off face a more challenging job market, which may further weaken the tightness of the labor market. Challenger warned that even if interest rates are cut in the future or if economic data improves in November, companies may not ramp up hiring significantly before the end of the year, and seasonal hiring conditions in 2025 are expected to remain subdued. Divergence with the Fed and ADP This data sharply contrasts with recent statements by Federal Reserve Chairman Jerome Powell about the "modest cooling" of the job market. The large number of layoffs could intensify concerns about the health of the labor market, particularly in the absence of official data due to the government shutdown, forcing economists to rely on private sector data (such as ADP, Revelio Labs) for analysis. The latest ADP employment figures for October showed a strong rebound, exceeding market expectations and showing some signs of stabilization, but the overall trend of weak labor demand remains unchanged. Revelio Labs will also release an employment market report later on Thursday. The data shows that private sector employment increased by 42,000 people last month, while the revised September data showed a decrease of 29,000 people. Economists surveyed had previously predicted a rebound of 28,000 private sector jobs, while the initial report for September was a decrease of 32,000 jobs. However, economists also emphasize the need for caution when interpreting the ADP report and point out its limitations in methodology and other aspects. Matthew Martin, Senior US Economist at Oxford Economics, says, "ADP data only covers private companies that rely on ADP for payroll processing, so its national representativeness is weak. ADP employment data should be seen as a supplement to employment data from government agencies such as the Labor Statistics Bureau, rather than a substitute." Additionally, companies like Amazon.com, Inc., Meta, Target Corporation, and Paramount Skydance Corp. were the focus of layoffs in October. Despite a 13% increase in revenue in the third quarter, Amazon.com, Inc. still laid off 14,000 people, shifting resources towards AI and cloud computing; Meta focused on general big model research and development through optimizing team structure.