AI Layoffs Are Rising: What New Data Says About the Job Market
A shift is moving through the job market again.
Companies announced more than 153,000 U.S. job cuts in October, a noticeable increase from this time last year.
The adjustment reflects changing business priorities, tighter budgets, and the growing influence of AI in everyday operations.
What the Numbers Show
According to the latest Challenger, Gray & Christmas report, job cuts were up 175%, compared to October of last year.
Sadly, more than 1 million layoffs have been announced so far in 2025, which is 65% higher than the same period in 2024. This marks the highest October total in over 20 years.
The Challenger Gray report also notes that the last time a single month saw such a spike in layoffs was in 2003, when automation began changing operations.
The numbers don’t necessarily mean unemployment has spiked suddenly, but they do show that more companies are making cost adjustments and rethinking staffing structures heading into the new year.
The Impact of AI Workforce Changes
AI adoption is one of the most cited drivers behind these restructuring decisions.
Companies are continuing to automate:
Administrative support
Content workflows
Internal data processing
Customer service tasks
Additional labor market research from Lightcast states that up to 40% of the U.S. workforce will require retraining or reskilling in the next few years as automation tools become standard in day-to-day operations.
IBM’s Global Workforce Study found similar patterns. Thankfully, their reporting states that many companies are planning to retrain employees, rather than replace them outright.
Also, not every industry is affected in the same way. For example, these industries continue to see steady hiring:
Healthcare
Skilled trades
Education
Hospitality
Meanwhile, the following industries are more focused on restructuring than outright layoffs:
Media
Tech
Retail
Corporate support roles
Why the Labor Market Feels Hard to Read Right Now
One thing making this moment especially confusing is the ongoing federal government shutdown.
Official employment data has been paused, including reports that typically outline whether AI layoffs in 2025 are actually leading to job losses.
Without those figures, companies, workers, and policymakers are relying on private data sets from companies like ADP and Challenger to interpret what is happening.
Those data points offer clues, but they’re not as comprehensive as government jobs reporting, which usually acts as the baseline for economic decision-making.
Layoff Trends in 2025: What To Watch for Next
With so many moving parts in place, the picture is still taking shape.
Some companies are cutting jobs while planning to rehire in new roles that align with AI and automation. Others are slowing down their spending until the broader economic outlook becomes clearer.
For everyday Americans like us, this is a moment to stay aware, not alarmed.
Upskilling, reskilling, and staying familiar with AI-assisted tools are increasingly becoming part of long-term job security, even in fields that aren’t tech-focused.
It’s important to remember the overall labor market isn’t collapsing, but it is changing. And the reason to pay close attention is because it’s shifting gently, steadily, and more rapidly in some sectors more than others.
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