Tech, AI and federal tariffs are increasingly blamed for a 29% monthly increase in US employer-announced layoffs nationwide in July, according to a report from Challenger Gray & Christmas, an outplacement firm that helps businesses and employees deal with layoffs.
In New Jersey, there were 3,557 employer-announced job cuts in July, bringing the state’s 2025 year-to-date total to 26,695, the report said. This represents a 362% increase from the same seven-month period in 2024 when there were 5,776 layoffs.
Washington, D.C. had 3,000 employer-announced job cuts in July, behind New Jersey, but the capital still leads the nation by far in layoffs on a year-to-date basis due to the downsizing of the federal government that began in January and the ripple effect that has had on contractors, nonprofits and other businesses in the area.
So far in 2025 there have been 292,586 jobs lost in Washington, D.C. – which is a 755% increase compared to the first seven months of 2024 when 34,220 jobs were lost, the report said.
Nationwide, U.S.-based employers announced 62,075 job cuts in the month of July, up 29% from June’s 47,999. This is a 140% increase from 25,885 announced in July of 2024.
In the first seven months of 2025, U.S. companies have announced 806,383 job cuts, the highest YTD total since 2020 when 1,847,696 were announced. This represents a 75% increase from the 460,530 job cuts announced through the first seven months of last year.
“We are seeing the Federal budget cuts implemented by DOGE impact nonprofits and healthcare in addition to the government,” said Andrew Challenger, senior vice president and labor expert for Challenger, Gray & Christmas. “AI was cited for over 10,000 cuts last month, and tariff concerns have impacted nearly 6,000 jobs this year.”
Top Reasons Given by Employers for YTD Layoffs
“DOGE Impact” (the Department of Department of Government Efficiency formerly led by Elon Musk) remains the leading reason for job cut announcements in 2025, cited in 289,679 planned layoffs so far this year. This includes direct reductions to the federal workforce and its contractors. An additional 13,056 cuts have been attributed to “DOGE downstream impact,” such as the loss of funding to private nonprofits and affiliated organizations.
Market and Economic Conditions are the second-most cited reason for workforce reductions, responsible for 171,083 cuts year to date. This reflects a continued response to economic uncertainty, inflation, and shifting demand across multiple sectors.
Closings of stores, units, or plants have led to 120,226 layoffs so far this year, while Restructuring efforts have resulted in 66,879 job cuts. Bankruptcies accounted for another 35,641 layoffs.
Technological Updates, including automation and AI implementation, have led to 20,219 job cuts in 2025. Another 10,375 were explicitly attributed to artificial intelligence, suggesting a significant acceleration in AI-related restructuring.
Other notable drivers of cuts include Cost-Cutting (19,977), Contract Losses (9,591), and Financial Losses (4,909). A total of 19,772 cuts were announced without a specified reason.
The report said the five industries with the most announced layoffs so far in 2025 compared to the same period in 2024 were: Government 292,294; Technology 89,251; Retail 80,487; Services 53,438; and Warehousing 38,943.
Hiring Outlook
U.S.-based employers are planning to add 86,132 jobs through July 2025, compared to 73,596 through the same period in 2024, the report said.
The Entertainment & Leisure sector accounts for nearly a third of all hiring plans so far this year, with 28,190 new positions announced, potentially reflecting a rebound in seasonal and service-related roles. Insurance employers planned 12,800 hires, compared to none last year, and Automotive announced 6,161 new jobs, up from 4,122 in 2024.
Technology hiring continues to decline, with companies in the sector announcing just 5,510 new jobs in 2025, down 58% from 13,263 in the same period last year. Other sectors showing significant year-over-year drops include Construction (down 76%), Industrial Goods (down 37%), and Energy, which fell by more than 90% from 11,327 hires in 2024 to 1,070 this year.
