July Layoffs Higher Compared to Year Ago, Hiring Plans Lowest Since 2009: Challenger Data

A street sign in front of the New York Stock Exchange in New York, on June 14, 2022. (Seth Wenig/AP Photo)

Layoffs were slightly higher compared to a year ago while hiring efforts have stalled, signaling that the U.S. labor market continues to cool off kicking off the second half of 2024.

New data from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. revealed that U.S.-based employers announced nearly 26,000 job cuts in July, down 47 percent from the previous month, but up 9 percent from the same time a year ago.

Last month’s layoffs were the highest for this time of the year since 2020 when companies slashed more than 262,000 positions.

Year to date, companies have announced 460,530 job cuts, down 4.4 percent from the same seven-month period in 2023. This represents the third-highest year-to-date total since 2009.

Five industries led the number of layoffs in July: technology (6,009), services (2,932), food manufacturing (2,423), consumer products (1,807), and health care (1,711).

Cost-cutting was the leading reason for the layoffs last month and in 2024, followed by market or economic conditions, business closing, and restructuring.

On the flip side, hiring plans are the lowest since 2012, with U.S.-based firms announcing plans to hire 3,676 workers, the lowest total for July since Challenger monitored hiring announcements in 2009.

Year to date, employers have announced plans to hire nearly 74,000 workers, the lowest seven-month span since 2012.

“The job market is indeed cooling, with hiring at the lowest point in over a decade. While we are seeing increased cuts in manufacturing sectors, both consumer and industrial, most industries are cutting below last year’s levels,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc.

A Look at Layoffs in 2024

Throughout last year, it appeared that 2023 was the year of layoffs. A plethora of firms across finance, media, tech, and retail—big and small—announced sweeping layoffs. Challenger estimated that company layoffs were up 98 percent from 2022, the highest annual total since 2020.

Heading into the fresh calendar year, a Resume Builder survey anticipated that four in 10 companies expected to have layoffs in 2024, citing recession fears and the growth of artificial intelligence.

Layoffs have also been prevalent in 2024.

In the tech sector, for example, Google extended last year’s 6 percent reduction in the global workforce by terminating hundreds of more employees so far this year.

Microsoft eliminated about 1,900 individuals at Activision, Zbox, and ZeniMax in June. Amazon-owned live-streaming platform Twitch trimmed its headcount by removing 500 jobs, impacting a third of its staff. Video game software company Unity Software cut 25 percent of its employees.

The banking sector has been still laying off scores of workers this year.

BlackRock headquarters in New York City, on Feb. 5, 2024. (Samira Bouaou/The Epoch Times)

Citigroup announced that it would lay off 20,000 employees over the next two years to save $2.5 billion over the long term. BlackRock also laid off hundreds of people from its workforce of 20,000, and Morgan Stanley fired hundreds of employees in its wealth-management division.

Elsewhere across the marketplace, Expedia Group cut 1,500 roles, UPS slashed 12,000 positions, Estée Lauder confirmed it would cut as much as 5 percent of its company as part of restructuring efforts, and Paramount Global announced 800 job cuts.

According to data compiled by Layoffs.fyi, there have been more layoffs across multiple sectors over the past month.

NerdWallet cut 15 percent of its workforce on July 30. Salesforce axed 300 jobs on July 15. Intuit slashed 1,800 positions on July 10. DVD rentals and streaming service Redbox shut down and terminated 100 percent of its employees.

Still, despite the high number of job cuts, Bureau of Labor Statistics (BLS) figures show that layoffs and discharges are below pre-crisis levels.

Reading the 2025 Tea Leaves

The Federal Reserve, alluding to various labor market data points, says that the jobs arena is returning to better balance and becoming looser.

While speaking to reporters at a post-meeting press conference on July 31, Fed Chair Jerome Powell even warned that the labor market is vulnerable and that “downside risks are real now.”

So far this year, the U.S. economy has created an average of 222,000 new jobs per month. The unemployment rate ticked up to 4.1 percent in June.

With the first half of 2024 in the rear-view mirror, economists are already attempting to determine labor market conditions for the new year.

The consensus is that job growth will slow, but conditions will remain solid.

A recent Bankrate survey found that employers will create half as many jobs—an average of 117,000—through the first quarter of 2025. Unemployment is expected to stay above 4 percent.

“We do expect that an overall slowing of the economy this year will result in an increase in the unemployment rate, even if the slowdown is not a full-fledged recession,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association, in the report.

Economists at the University of Michigan expect the economy to add approximately 1.5 million jobs in 2025.

Preston Caldwell, the chief economist at Morningstar, predicts slowing job growth until late 2025 amid a falling GDP.

“By 2026, the unemployment rate will rise around 1 percentage point compared with its 2023 average level,” Caldwell wrote in a note. Job growth should recover from 2026 to 2028 in tandem with GDP growth. But the job market will remain in balance.”

“The postpandemic excesses of the U.S. job market have largely subsided,” he added.

For now, businesses might be slowing down their hiring efforts, Challenger noted.

“The job market is indeed cooling, with hiring at the lowest point in over a decade. While we are seeing increased cuts in manufacturing sectors, both consumer and industrial, most industries are cutting below last year’s levels,” he said.