For most of 2025, the job market was characterized by the phrase "no hire, no fire." During this period, job seekers faced limited employment opportunities, while existing workers enjoyed a sense of job security. However, labor experts are now warning that this delicate balance may be shifting. Recent mass layoffs at prominent companies, including Amazon and UPS, could indicate a significant turning point for the labor market.
On Tuesday, Amazon announced a staggering 14,000 job cuts, attributing the decision to a strategic shift towards artificial intelligence. Concurrently, UPS reported a reduction in its workforce by 48,000 employees compared to the previous year. In addition, Target has informed a state employment agency in Minnesota about its plans to lay off over 800 workers in January, as part of a larger corporate restructuring. Last week, Target also disclosed that it would eliminate 1,800 corporate positions as part of its initiative to decrease its global workforce by approximately 8%.
These mass layoffs come at a time when the Federal Reserve is closely monitoring the labor market for signs of weakness. Fed Chair Jerome Powell expressed concerns about slowing hiring when announcing the central bank's first rate cut of 2025 last month. Experts suggest that the announcements from Amazon and UPS provide substantial evidence for the Fed's concerns. John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, stated, "No question that this is a shift, and it does seem to me it signals that 'no hire, no fire' is a thing of the past. These are major layoffs, the kind of which we only see in periods of real change in the economy."
Even prior to Tuesday's job cuts, layoffs had already been on the rise. Data from Challenger, Gray & Christmas indicates that employers across the U.S. cut nearly 950,000 jobs in 2025 through September, marking the highest number of layoffs since 2020. With the government shutdown suspending official federal reports on the labor market, the Fed's upcoming interest rate decision on October 29 will occur without recent hiring data. Job growth has also slowed significantly, with average monthly payroll gains dropping to roughly 27,000 between May and August, a stark decline from nearly 123,000 per month earlier in the year.
On October 1, the ADP National Employment Report revealed a decline of 32,000 jobs in private payrolls for September. Reports suggest that layoffs have further accelerated in October, according to Grace Zwemmer, an associate economist with Oxford Economics. Additionally, state-level data indicated that jobless claims by federal employees exceeded 10,000 for the week ending October 18, highlighting the adverse effects of the congressional stalemate.
Despite the current surge in layoffs, the nation's unemployment rate remains low by historical standards, increasing slightly to 4.3% in August from 4.2% in July. Experts believe that the latest layoffs are unlikely to lead to a dramatic spike in joblessness. Andy Stettner, director of economy and jobs at the Century Foundation, remarked, "When we look at the scale of the announcements vis-à-vis the broader economy and the data we have from unemployment claims, we don't see them yet at a scale where the unemployment rate is going to shoot up." However, he cautioned that these larger corporate downsizings occur in a context of limited job openings, which could hinder displaced workers' ability to secure new employment.
The ranks of long-term unemployed individuals, those searching for work for over six months, are projected to rise even higher from August's figure of nearly 2 million, the highest level since 2022. Experts attribute these job cuts to multiple factors, including a growing reliance on artificial intelligence and broader economic uncertainties.
Many employers are reducing their workforce due to various reasons. Earlier this year, Amazon CEO Andy Jassy noted that the company's investments in AI tools would enable it to streamline operations and reduce the need for human labor. "Amazon really pointed to robotics, AI, and new technology — and being on the cutting edge of that technology — for shifting jobs," Challenger explained. A recent study from career site Indeed found that about one-quarter of technology industry workers reported experiencing layoffs or role eliminations due to the adoption of AI over the past two years.
Other companies, like UPS, are also scaling back hiring or cutting jobs for different reasons. UPS has cited the impact of tariffs from the Trump administration and a decline in shipping volumes from Amazon, its largest customer, as contributing factors. Similarly, children’s clothing brand Carter's announced it would cut 300 jobs (15% of its workforce) and close 150 stores over the next three years, largely due to increased costs associated with tariffs.
In the midst of these changes, public sentiment regarding the job market appears to be growing increasingly pessimistic. Recent polling by CBS News revealed that approximately 52% of Americans view the labor market as unfavorable, a notable increase of seven percentage points since April. Challenger concluded, "We are moving more into a time where job security might be more precarious."
