Retail Sector Sheds More Jobs Than Usual as Industry Adjusts to Uncertain Future

Retailers reliant on Chinese products are facing severe challenges and scrambling to adjust, says Swap’s chief marketing officer.

Shoppers enter a Forever 21 fashion retail store at the King of Prussia mall in King of Prussia, Pa., on Sept. 30, 2019. Mark Makela/File/Reuters

As mass merchandisers, warehouse clubs, department stores, and other apparel retailers adapt to the uncertain road ahead, a recently released industry report shows the sector is shedding more jobs than usual after the holiday season.

According to global outplacement and business and executive coaching firm Challenger, Gray & Christmas, U.S.-based employers announced 172,017 job cuts in February, the highest monthly total since 2009, when 186,350 job cuts were recorded. It is also the highest monthly total since July 2020, when 262,649 cuts were announced.

So far this year, employers have announced 221,812 job cuts, the highest year-to-date total since 2009, when 428,099 job cuts were planned. It is up 33 percent from the 166,945 cuts announced during the same period in 2024.

The government led all sectors in job cuts in February. Challenger tracked 62,242 announced job cuts by the federal government in the month across 17 agencies. So far this year, the government has made 62,530 cuts, representing a 41,311 percent increase from the 151 cuts announced through February 2024.

Retailers followed with 38,956 job-cut plans, totaling 45,375. This is a 572 percent increase from the 6,751 retail job cuts announced in the first two months of 2024. According to the monthly U.S. unemployment report from the Bureau of Labor Statistics (BLS), the retail sector lost 6,300 jobs in January.

“Private companies announced plans to shed thousands of jobs last month, particularly in retail and technology. With the impact of the Department of Government Efficiency’s actions, as well as canceled government contracts, fears of trade wars and bankruptcies, job cuts soared in February,” said Andrew Challenger, senior vice president and workplace expert at Challenger.

Most of those job cuts occurred in the food and beverage industry, where the number of jobs declined by more than 15,000 in February, according to BLS data. The apparel industry also suffered from a handful of post-holiday bankruptcies, with Forever 21’s parent company filing for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware on March 16.

In its filing, Forever 21 stated that it will implement an “orderly wind-down” of its U.S. operations while simultaneously soliciting interest in a possible sale of some or all of its assets with support from its lenders. The Los Angeles-based apparel chain operates approximately 540 stores nationwide.

Besides Forever 21, Joann’s Inc. and Big Lots are also seeking Chapter 11 bankruptcy protection after the holiday season. Other retailers, including Walmart, Macy’s, Kroger’s, Kohl’s, and Rite Aid, have also announced corporate or regional job cuts, while Walgreens agreed earlier this month to go private in a $23.7 billion deal with Wall Street private equity firm Sycamore Partners.

In a recent industry report, e-commerce consulting firm Swap unveiled some of the future challenges and strategies for navigating a rapidly shifting global market. Swap Chief Marketing Officer Juan Pellerano-Rendon told The Epoch Times via a Zoom interview that smaller e-commerce companies and retailers that rely on Chinese products are facing severe challenges and are scrambling to adjust.

As that filters down the retail workforce, Pellerano-Rendon noted the recent spate of layoffs and bankruptcies. He mentioned that some companies are adapting by hiring part-time workers and contractors, reducing overhead compared to full-time positions.

“This Uber workforce started with the gig economy but has now moved into more businesses,” Pellerano-Rendon said “So that is where I think you will start to see the shift in terms of employment, where [retailers] are not looking directly to cut jobs but reduce hours and costs.”

Amid recent job losses, the latest U.S. Census Bureau report from March 17 shows tepid retail sales, falling well below Wall Street expectations. Through February, advance estimates of U.S. retail and food services sales were up by only 0.5 percent from January, and up by 3.4 percent from a year ago. This fell short of the consensus forecast, which expected a 0.7 percent gain.

Creighton University economist Ernie Goss told The Epoch Times that the retail and manufacturing sectors are among the key U.S. industries vulnerable to fears of rising tariffs, which could drive import prices to record-high levels.

“If the economy turns, we could see a lot more job cuts,” said Goss, director of Creighton University’s Center for Economic Research, which produces the highly watched Mid-America Business Conditions Index survey of supply managers each month.

Besides possible layoffs ahead, Bank of America Institute economist Taylor Bowley noted in a new research report that the retail sector is also struggling to find and retain Generation Z workers, who frequently switch jobs.

While increased wage growth helps ease some of this pressure, the number of Gen Z households receiving unemployment grew by nearly 32 percent year over year in February. Unemployment among new entrants to the labor market is on the rise, she said.

“The March jobs report from the BLS shows a surge in the underemployment rate, implying some workers are taking whatever jobs they can find in this low-churn labor market,” Browley told The Epoch Times via email. “For Gen Z, this could have long-term career implications as they struggle to find roles. It could also have ramifications for U.S. productivity. “