US-based employers announced 75,891 job cuts in August, a 193% jump from the 25,885 layoffs reported in July.
The data in a new report by Challenger, Gray & Christmas, Inc shows a 1% increase compared to the same period in 2023 when 75,151 cuts were announced.
For the year, employers have disclosed 536,421 job cuts. This is down 3.7% from the 557,057 layoffs recorded by August of last year.
Excluding the pandemic-driven cuts of August 2020, 2024 marks the highest August total since 2009, when 76,456 layoffs were announced.
Economic Pressures Drive Layoffs
The surge in job cuts reflects mounting economic uncertainty. Rising operational costs, concerns over a possible economic slowdown, and shifting market dynamics have pushed companies to reconsider their workforce strategies.
Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc, said:
“Companies are facing similar pressures to last year, making difficult labor decisions due to ongoing challenges.
Which Industries Are Cutting Workers?
Several sectors are leading the job cut trends, with technology and manufacturing seeing some of the highest numbers.
Technology
The technology industry recorded 39,563 job cuts in August, bringing its year-to-date total to 105,426.
This represents a 29% decrease from the 149,452 layoffs recorded during the same period in 2023.
According to Challenger, the shift in tech from growth to profitability, coupled with the adoption of AI and automation, has contributed to the reductions.
Despite the cuts, tech talent remains in high demand, though the current slower hiring market means it could take longer for displaced workers to find new roles.
Education
The education industry, including schools, universities, and education service providers, has announced 25,396 job cuts in 2024.
This is a 222% increase compared to the 7,878 layoffs recorded through August 2023.
Entertainment and Leisure
Companies in entertainment and leisure cut 21,686 jobs in 2024, an 85% increase from the 11,699 cuts announced last year.
Challenger said:
“Post-pandemic demand and competition from alternative accommodation providers, along with labor demands for higher wages and more hours, are driving cuts in this sector."
Industrial Manufacturing
Industrial manufacturing announced 17,828 job cuts, up 261% from 4,943 cuts during the same period last year.
Factors such as over-hiring during the pandemic and increased automation are likely contributors to these layoffs.
Retail Sector
Retail job cuts have decreased by 56% compared to 2023. So far this year, retailers have announced 24,489 layoffs, down from 55,755 cuts by the same time last year.
Major store closures and bankruptcies, such as Macy’s and LL Flooring, continue to challenge the sector, though the overall number of layoffs has fallen.
Media and News
Media companies, including television, film, streaming, and news outlets, have announced 12,122 job cuts in 2024, down 37% from 19,117 in 2023.
In August alone, the news industry saw 533 layoffs, the highest monthly total since February 2024.
Why Are Companies Cutting Jobs?
In August, 37,403 job cuts were attributed to cost-cutting measures, while 16,439 were linked to market and economic conditions. Notably, for the first time since April, artificial intelligence (AI) was cited as a reason for layoffs, with 5,943 tech jobs cut due to AI advancements. For the year, 7,126 job cuts have been driven by AI.
Record Low Hiring Plans
U.S. employers have announced 79,697 hiring plans so far this year, a 41% decrease from the 135,980 plans recorded through August 2023. This year’s hiring plans mark the lowest total since Challenger began tracking in 2005. The previous record low was in 2008, when 80,387 hiring plans were announced.
What Lies Ahead for the Job Market?
As companies continue to face economic pressures and adapt to new technologies like AI, the job market may see further changes in the months to come. While certain industries, like tech, may experience slow hiring, other sectors could stabilize as businesses recalibrate their workforce strategies.
