US October Layoffs Soar 183% Month-on-Month! Combination of AI Penetration and Weak Consumer Spending

The latest report from employment consulting firm Challenger, Gray & Christmas (CGC) shows that US companies announced 153,000 job cuts in October, a surge of 183% compared to the previous month. This marks the highest monthly total since 2003 and a 175% increase compared to the same period last year. So far this year, US companies have announced cumulative layoffs of approximately 1.1 million people, a 65% increase year-on-year, making it the year with the largest scale of layoffs since the pandemic.

Andrew Challenger, Senior Vice President of CGC, wrote in the report: "This is the highest October total in over two decades. Some industries are correcting after the post-pandemic hiring boom, but the widespread application of artificial intelligence, weak consumer and business spending, and rising cost pressures are forcing companies to tighten their belts, freeze hiring, or reduce staff."

The report indicates that the technology, retail, and service industries remain the sectors most concentrated with layoffs. Among them, the technology sector announced 33,300 job cuts in October, nearly six times the figure from September, making it the area most affected by AI integration and automation processes.

Challenger believes that it has become significantly more difficult for laid-off workers to find new jobs now, with "job search cycles lengthening and job availability decreasing." This trend may further loosen the supply-demand balance in the labor market and also indicates that the momentum of employment growth is weakening.

The report was released as the US government remains shut down due to the prolonged failure of Congress to reach a consensus on the budget. The collection and release of official labor market data have been suspended, making private sector data, including the CGC report, crucial alternative indicators for market observation.

However, analysts caution that this report is highly volatile. Furthermore, judging from the ADP employment data released earlier this week, the US private sector added a net 42,000 new jobs in October, reversing the declining trend of the previous two consecutive months, indicating that companies are maintaining some resilience through cautious expansion.