- US job cuts hit the highest level since July 2020, fueled by DOGE’s layoffs of federal workers.
- Challenger, Gray & Christmas reported a 245% increase in job cut announcements from February 2024.
- Retail and tech sectors also have also seen significant layoffs amid economic uncertainty.
Monthly job cut announcements in the US surged to their highest level since the COVID-19 pandemic last month, according to data from Challenger, Gray & Christmas.
The job cuts, spearheaded by President Donald Trump’s DOGE committee, totaled 172,017 in February, the highest monthly level since July 2020 and the highest total for the month of February since 2009.
The reported job cuts in February represented a 245% increase from the 49,975 job cuts announced in February, and a 103% increase from the 84,638 job cuts announced in February 2024.
“With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,” said Andrew Challenger, Senior Vice President at Challenger, Gray & Christmas.
Challenger tracked 62,242 job cuts announced by the federal government last month across 17 different agencies. That’s a more than increase from the 151 government job cuts announced in February 2024.
The spike is important for investors, who will be paying close attention to Friday’s jobs report, examining whether the DOGE-led job cuts are affecting the economic data.
Challenger’s report comes one day after the release of the ADP employment report for February. Private payrolls rose by 77,000, badly missing estimates of 148,000.
It’s not just the government announcing job cuts, though. Other areas of the economy that were vulnerable to job cuts include the retail and technology sectors, which announced 38,956 and 14,554 job cuts respectively in February.
The layoffs may keep mounting. Estimates on Wall Street suggest DOGE could cut as many as 300,000 jobs, and Apollo economist Torsten Sløk recently noted that two contractor jobs are tied to every government job. That means total layoffs could quickly approach one million if DOGE follows through with its job cuts.
Meanwhile, economic uncertainty is heightened amid Trump’s tariff threats against Mexico and Canada and the growing risk of a recession hitting the economy.
And the job cuts could even lead to voluntary layoffs, according to Challenger.
“When mass layoffs occur, it often leaves remaining staff feeling uneasy and uncertain. The likelihood that many more workers leave voluntarily is high,” the firm said.
Economists expect the US economy to have added 170,000 jobs in February, with the unemployment rate remaining at 4.0%.
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