US mass layoff highest since 2016: US mass layoff alert: WARN notices hit highest level since 2016 – why economists warn of a weakening labour market

Mass layoffs in the USA 2025: The rapid increase in mass layoff notices in the United States is raising new concerns about the strength of the labor market. A new analysis from Goldman Sachs shows that Worker Adjustment and Retraining Notification (WARN) notices, which are required before companies carry out mass layoffs, have increased in recent weeks and are now at their highest level since 2016, outside of a spike at the beginning of the pandemic.

U.S. Labor Market Is Moving Away From Jerome Powell’s “Low Hiring, Low Fire” Trend

The job market remains largely stagnant through most of 2025. Both hiring and layoffs have remained historically low, according to a report, a trend that Fed Chairman Jerome Powell previously described as a “low-hiring, low-fire” environment. Economists have seen this stability as an important buffer against recession risks; Moody’s Mark Zandi called the low layoffs a “firewall” preventing a deeper downturn, according to the Newsweek report.
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Goldman Sachs Signals Increasing Weakness in US Labor Market

However, this firewall may be weakening. Numerous reports now show that layoffs are accelerating, and Goldman Sachs noted that the increase is particularly troubling given today’s already slow hiring pace.

Layoff Mentions Increase in Russell 3000 Earnings Calls

Beyond the WARN data, Goldman’s economists examined earnings calls from Russell 3000 companies. They found that more companies are openly discussing layoffs and that AI is increasingly part of those conversations. In the tech sector, nearly half of discussions about layoffs in the last two quarters referenced artificial intelligence.

Layoffs in the US Increased 175% in October Compared to the Previous Year

Goldman also cited findings from job placement firm Challenger, Gray & Christmas, which reported that U.S. employers announced 153,074 layoffs in October; This figure increased by 175% compared to the previous year and 183% compared to September.
“This comes as AI adoption, softening consumer and corporate spending, and rising costs lead to belt-tightening and hiring freezes,” workplace expert Andy Challenger said, as quoted by Newsweek.
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Year-to-Date Layoffs Reach 1.1 Million – Highest Level Since 2020

During October, employers announced 1.1 million layoffs; This is a 65% increase over the 664,839 layoffs in the same period in 2024 and is already 44% higher than last year as a whole. Challenger said year-to-date layoffs have reached the highest level since 2020, when more than 2.3 million cuts were announced through October.

Economists Warn of a Tougher Job Market Ahead

Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei said the increase in layoffs would be concerning as hiring rates remain low, making it harder for unemployed workers to find new jobs, according to the report. “A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find work,” they wrote, as reported by Newsweek.

Economist Justin Wolfers echoed this sentiment, writing on social media

FAQ

What is a WARN notification and why is it important?
A WARN notice is a necessary warning before major layoffs, and rising numbers mean more layoffs are likely.

How many layoffs were announced in October?
There were 153,074 outages, a sharp increase from both last year and last month.