US Planned Layoffs Surge in August, According to Recruitment Firm Challenger – Reuters

U.S. employers reported the highest number of layoffs in five months during August, predominantly driven by reductions in the technology sector. This surge comes as concerns about economic growth and rising costs continue to loom, as indicated by a monthly report on workforce reductions.

In August, companies announced a total of 75,891 layoffs, significantly increasing from July’s figures and marking the largest monthly rise in a year, according to outplacement firm Challenger, Gray and Christmas. However, announced layoffs are still down 3.7% for the year thus far.

Andrew Challenger, Vice President of the firm, noted that the increase in job cuts indicates mounting economic uncertainty and shifting market conditions. He explained that businesses are grappling with various pressures, including escalating operational costs and fears of a potential economic downturn, prompting difficult decisions regarding workforce management.

This data emerges alongside rising concerns about the job market, as recent government reports have shown increases in the unemployment rate and the number of layoffs in July. The shift in employment data has attracted the attention of Federal Reserve officials, who are now anticipated to initiate interest rate cuts to safeguard the job market from further decline.

The technology sector accounted for over half of the announced cuts in August, totaling 39,563 positions— a significant jump from around 6,000 in July and the highest since January 2023. The health sector followed with the second-largest layoff announcements, recording 6,158 job cuts.