Technology and services top industries for layoffs.
Layoffs were slightly higher compared to a year ago while hiring efforts have stalled, signaling that the U.S. labor market continues to cool off kicking off the second half of 2024.
Last month’s layoffs were the highest for this time of the year since 2020 when companies slashed more than 262,000 positions.
Year to date, companies have announced 460,530 job cuts, down 4.4 percent from the same seven-month period in 2023. This represents the third-highest year-to-date total since 2009.
Five industries led the number of layoffs in July: technology (6,009), services (2,932), food manufacturing (2,423), consumer products (1,807), and health care (1,711).
Cost-cutting was the leading reason for the layoffs last month and in 2024, followed by market or economic conditions, business closing, and restructuring.
On the flip side, hiring plans are the lowest since 2012, with U.S.-based firms announcing plans to hire 3,676 workers, the lowest total for July since Challenger monitored hiring announcements in 2009.
Year to date, employers have announced plans to hire nearly 74,000 workers, the lowest seven-month span since 2012.
“The job market is indeed cooling, with hiring at the lowest point in over a decade. While we are seeing increased cuts in manufacturing sectors, both consumer and industrial, most industries are cutting below last year’s levels,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc.
A Look at Layoffs in 2024
Throughout last year, it appeared that 2023 was the year of layoffs. A plethora of firms across finance, media, tech, and retail—big and small—announced sweeping layoffs. Challenger estimated that company layoffs were up 98 percent from 2022, the highest annual total since 2020.
Layoffs have also been prevalent in 2024.
The banking sector has been still laying off scores of workers this year.
NerdWallet cut 15 percent of its workforce on July 30. Salesforce axed 300 jobs on July 15. Intuit slashed 1,800 positions on July 10. DVD rentals and streaming service Redbox shut down and terminated 100 percent of its employees.
Reading the 2025 Tea Leaves
The Federal Reserve, alluding to various labor market data points, says that the jobs arena is returning to better balance and becoming looser.
So far this year, the U.S. economy has created an average of 222,000 new jobs per month. The unemployment rate ticked up to 4.1 percent in June.
With the first half of 2024 in the rear-view mirror, economists are already attempting to determine labor market conditions for the new year.
The consensus is that job growth will slow, but conditions will remain solid.
“We do expect that an overall slowing of the economy this year will result in an increase in the unemployment rate, even if the slowdown is not a full-fledged recession,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association, in the report.
“By 2026, the unemployment rate will rise around 1 percentage point compared with its 2023 average level,” Caldwell wrote in a note. Job growth should recover from 2026 to 2028 in tandem with GDP growth. But the job market will remain in balance.”
“The postpandemic excesses of the U.S. job market have largely subsided,” he added.
For now, businesses might be slowing down their hiring efforts, Challenger noted.
“The job market is indeed cooling, with hiring at the lowest point in over a decade. While we are seeing increased cuts in manufacturing sectors, both consumer and industrial, most industries are cutting below last year’s levels,” he said.