1.2 Million Layoffs in 2025 & Hiring Hits a 15-Year Low

Additional Resources

• Challenger, Gray & Christmas Year-End Report
• Glassdoor Employee Confidence Index
• U.S. Department of Labor Claims Report
• Revelio Public Labor Statistics

Transcript

Pete Newsome: 0:00

Welcome to cornering the job market for Thursday, January 8th. Today’s headlines include new jobs data, the latest unemployment numbers, and Glassdoor’s Employee Confidence Index. But first, December looked better, but 2025 was one of the toughest hiring years in more than a decade. The year-end report from Challenger Gray and Christmas opens with a positive note. December layoff announcements fell to the lowest monthly total in 17 months. That’s great. But when you zoom out and look at the year overall, employers announced more than 1.2 million job cuts in 2025, which is up 58% from 2024 and the highest annual total since 2020. Q4 layoffs were the highest for the quarter since 2008, even with the December improvement. Hiring plans were historically week too. Just over half a million hires were announced in 2025, which is down 34% from 2024, and that’s the lowest year to date level since 2010. Layoffs were led by government, followed by the technology, warehousing, and retail sectors. The employers cited big drivers like policy-linked actions, those specifically, and overall economic conditions as the top reasons for layoffs. AI-related cuts totaled just under $55,000, which is meaningful, but far from the biggest factor.

1:18

The bottom line is December is a real improvement, but it’s far from a recovery. One month does not erase a year where employers basically didn’t add headcount and it was just flat overall. So what we really need is to string together consecutive months of positive growth. Let’s hope that happens. The next data set is more of the same, some good, some bad. The good news, we added jobs in December. But the bad is that job postings and pay moved in the other direction. Ravelio Lab’s public labor statistics report shows the U.S. added about 71,000 jobs in December, and these numbers are higher than what ADP reported yesterday. They’re collecting data from different sources. They’re significantly higher, almost twice as much, so that’s a good sign. But demand signals were softer. Active job postings fell about 1.4% month over month, which points to employers pulling back on openings. Posted salaries for new jobs also were down roughly half a percent, with notable salary softness in education and health services. My takeaway from this really is that the market’s just flat. We see some variance in inconsistency from one data source to the next, but overall, they all just seem to indicate that things just aren’t moving significantly in any direction, at least not yet. Moving on to the next story. That’s a good thing. It came in at 211,750, which is the lowest since April 2024. That’s positive, but continuing claims went up by 56,000.

3:01

Low initial claims mean we aren’t seeing big layoffs, but rising continuing claims suggest it’s taking longer for people to get hired. That is not a good thing. We’re seeing companies just not moving. And that is consistent with pretty much all the data that I’m seeing right now, fewer job postings, softer pay, unfortunately, and companies are being more selective when hiring. So there’s a lot of market data, but let’s close today by looking at how people are feeling about all of this. If you felt burned out, cautious, or stuck last year, the data says you weren’t alone. According to the Glassdoor Employee Confidence Index, employee confidence rose modestly in December 2025, ending the year close to where it began, but only after a turbulent year for workers. In December, more employees reported a positive six-month business outlook than they did in November, but still slightly below the confidence levels at the end of 2024. Here’s the thing confidence didn’t slowly drift down and then recover. It collapsed mid-year. June marked the lowest employee confidence reading Glassdoor has ever recorded, and that goes back almost a decade. Keep in mind, that means confidence was lower this year than it was during COVID. That is meaningful to a significant degree.

4:20

Fears around trade wars and a government shutdown faded as the year went on, and confidence did come back up, and that’s really what plagued us mid-year, and rightfully so. But it didn’t surge, it hasn’t snapped back, it just sort of returned to familiar territory. Like workers are saying, okay, well, at least it could have been worse. And so that is certainly not a positive thing, but it is a trend in the right direction. But this report shows the pain wasn’t evenly shared. Government workers were hit the hardest. Confidence in government and public administration fell again in December, and that was the steepest drop of any industry. Glassdoor indicates why, that of course, the deferred uh resignation deadline that passed in October, where around 150,000 federal workers rolled off payroll. And look, that’s gonna leave a mark when something like that happens. It’s a big disruption. Surprisingly to me, in this report is that mid-level employees saw the biggest confidence drop of anyone. We hear a lot always about, or at least lately, about entry-level employees. They’re struggling in the market. I talk about that at least a couple of times a week. The job postings for entry level are down. There are job postings that claim to be entry-level that require experience. We’re seeing people who are having a difficult job with experience having to go down and pursue jobs they otherwise wouldn’t. So they’re competing for the entry-level roles. We know that’s happening. And also, people who are older in the market have always struggled, right?

5:56

Ageism is a thing. Companies want that mid-level employee typically. And so it is really surprising to me to see that mid-level employees had the biggest confidence drop of anyone. So that is something I’m gonna monitor very closely in the months ahead. So stay tuned. I’ll keep talking about that. But my takeaway from this is that we’re seeing stability. I mean, everything I’ve talked about today kind of indicates that, but just not optimism. We’re not there yet. And I believe that what happens in January when we start to see those numbers come out, that’s really gonna set the tone for this year in a major way. So those are your headlines today. But before we close, here’s your fun fact: walking meetings can increase creative output by 60%. Walking meetings, I like that.

6:46

I mean, I work at home now, I have to get away from my desk. I don’t naturally move around as much coming from the parking lot, going down the street for lunch. I eat at home most days from not having a meeting, and I just am not as active. So I have benefited from this. I didn’t realize it created or increased my creativity until reading this, but I certainly have become a fan of taking calls where I can when I can by being out walking. So that’s what I’m gonna do. If you can see this guy behind me, he certainly would like it if I took him out on a walk right now. So I’ll say goodbye for now and I’ll go do exactly that. Thanks for listening. Please like, subscribe, share with anyone who you think might be interested, and I’ll look forward to talking to you tomorrow.