TLDR: The United States experienced a dramatic 140% increase in layoffs in July 2025, marking the most significant surge since the initial phase of the COVID-19 pandemic. This sharp rise in job cuts, totaling 62,075 for the month, is primarily attributed to the growing impact of artificial intelligence on the workforce and the federal government’s aggressive downsizing initiatives under the Trump administration.
The United States is currently grappling with its most severe wave of job losses since the onset of the COVID-19 pandemic, with layoffs in July 2025 skyrocketing by 140% compared to the previous year. A report from outplacement firm Challenger, Gray & Christmas, cited by Newsweek, indicates that employers announced 62,075 job cuts last month. This figure represents a 29% increase from June and significantly surpasses the post-pandemic average for July, which stood at 23,584 between 2021 and 2024. It also exceeds the monthly average of 60,398 over the past decade.
The year-to-date total for 2025 has now reached a staggering 806,383 layoffs, marking a 75% increase over the same period in 2024 and already surpassing the total number of layoffs recorded throughout all of last year by 6%. This is the highest January-to-July total since 2020, when pandemic-induced shutdowns pushed job losses beyond 1.8 million.
Two primary factors are being highlighted as the main drivers behind this brutal surge in layoffs: the rapid advancement and adoption of artificial intelligence (AI) and the federal government’s aggressive downsizing efforts. AI has already been linked to over 20,000 job cuts this year alone. Concurrently, a substantial portion of the 2025 layoffs, specifically 292,294 since the year began, have originated from the federal government. This is a direct result of the Trump administration’s Department of Government Efficiency (DOGE) continuing its mission to reduce the size of numerous agencies. The ‘DOGE Downstream Impact’ has also affected contractors and organizations reliant on public funding.
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Economist Mark Zandi of Moody’s Analytics has pointed to concerning labor market trends, noting that more than 53% of industries reported job cuts in July 2025, with only the healthcare sector showing employment growth. Historically, when over 50% of the 400 tracked industries experience a decline in employment, it has been a reliable indicator of an impending recession.
