Mass layoff notices "surge," data continuously "sound alarms," and the U.S. job market takes a sharp downturn.

Mass layoff notices "surge," data continuously "sound alarms," and the U.S. job market takes a sharp downturn.

The latest data from the private sector shows that the U.S. labor market is undergoing a sharp and profound cooling, with the rate of deterioration possibly far outpacing what official statistics can reveal. From a surge in corporate layoff announcements to multiple alternative employment tracking indicators turning negative, leading indicators are intensively flashing warning signals, suggesting that a potential employment recession may be imminent.

The most striking alarm comes from the surge in corporate layoffs. According to the latest report from Challenger, Gray & Christmas, the number of corporate layoffs in October soared to 153,000, setting the highest record for this month in more than 20 years. Meanwhile, the number of Worker Adjustment and Retraining Notification (WARN) notices tracked by Goldman Sachs also reached a new high since 2016 (excluding anomalies during the pandemic), which is a pre-layoff alert that companies must file prior to mass layoffs.

These trends are reshaping market expectations for the economic outlook. The resilient jobs market has been the key pillar supporting the "soft landing" narrative, but now, the sharp downturn in the labor market is significantly increasing recession risks. Investors and analysts are increasingly turning to these high-frequency alternative data points to assess the actual state of the economy, putting new pressure on the Federal Reserve, as the market begins to question whether it is "far behind the curve" on rate cuts.

Due to possible delays in the release of government data, market attention has shifted to private sector data released by institutions such as ADP, Revelio Labs, and Goldman Sachs. This data collectively paints a picture of rapidly deteriorating job momentum, standing in stark contrast to official statistics as of August, and setting a pessimistic tone for upcoming official employment reports.

Wave of layoffs hits, multiple indicators flash red

Signs of labor market weakness first show up in corporate layoff actions. Challenger’s report shows that October’s layoff pace far exceeds the average of previous years. Andy Challenger, Chief Revenue Officer of Challenger, Gray & Christmas, said: “Some sectors are now revising the hiring frenzy seen during the pandemic, but at the same time, adoption of artificial intelligence, weak consumer and business spending, and rising costs are jointly driving companies to cut spending and freeze hiring.” He added that those laid off are now finding it much more difficult to land new jobs quickly.

Other high-frequency data supports this trend. According to ADP's latest weekly report, in the four weeks ending October 25, private companies cut an average of 11,250 jobs per week, meaning the private sector may have lost about 45,000 jobs in just the latter half of October. This marks the largest monthly job decline since March 2023.

Another data firm, Revelio Labs, also paints a bleak outlook. Its data shows jobs declined by 9,100 in October, the second worst monthly performance in 2025. While this decrease was mainly driven by job cuts in government, manufacturing and trade sectors also saw losses.

Goldman’s multi-dimensional tracking: Labor market weakness is a certainty

As a widely watched investment bank, Goldman Sachs, through its alternative economic data models, concludes further weakening in the labor market. The firm expects that after factoring in deferred resignations from government programs, official October nonfarm employment may record a negative growth of 50,000.

Goldman’s analysis reveals deeper structural issues:

Leading indicators worsen: The bank’s new layoff tracking model shows that the upward trend in layoffs over recent months has exceeded pre-pandemic levels. The WARN layoff notification count tracked by Goldman is sharply rising and should be watched closely. Historically, WARN notices and Challenger layoff reports lead official initial jobless claims by about two months, suggesting that currently low jobless claims may soon start to climb.

Labor market slackening: Goldman's vacancy and market tightness tracking indicators continue to decline, indicating conditions are weaker than shown in official data as of August.

Corporate attitudes shift: Analysis of earnings calls from Russell 3000 index companies shows a rising proportion of companies mentioning layoffs, especially in Q3 2025 earnings season, reflecting companies’ pessimism about future employment needs.

AI drives new layoff wave, recession risk surges

A notable feature of this layoff wave is the important role played by artificial intelligence. Goldman’s analysis points out that since the release of ChatGPT in November 2022, AI has quickly become the core topic in tech sector discussions about staffing. In other industries, the integration of AI and workforce planning also accelerated significantly in 2025. Especially in sectors with high AI adoption, such as tech, finance, and real estate, companies more frequently mention AI when discussing layoffs.

This technology-driven structural shift, combined with cyclical economic downturn pressure, is significantly raising future employment risks. Goldman’s quantitative model forecasts that the U.S. unemployment rate’s median and average value six months from now may reach 4.5%, up 0.2 percentage points from August.

More importantly, the model shows a sharp rise in tail risks. Right now, the probability that the unemployment rate rises by 0.5 percentage points or more in the next six months is 20-25%, whereas six months prior it was only 10%. In other words, even if an employment recession has not fully arrived, its likelihood has risen significantly, especially as more companies initiate large-scale, AI-driven layoffs to cut costs. Recently, a series of large firms—including UPS, Amazon, General Motors (GM), Paramount, and Ford—have announced layoff plans affecting thousands or even tens of thousands of employees, adding real evidence to the warning signals in these data models.

The following is an overview of the most notable layoff announcements by S&P 500 companies so far in 2025:

October 29, 2025: CarMax cuts about 350 customer service jobs due to weak profitsOctober 29, 2025: Paramount begins laying off 2,000 employees months after merging with Skydance MediaOctober 29, 2025: GM announces layoffs of over 1,700 in Michigan and Ohio plants amid EV challengesOctober 28, 2025: UPS cuts 48,000 management and operations jobsOctober 28, 2025: Amazon to cut about 14,000 corporate positionsOctober 23, 2025: Target to lay off about 1,000 peopleOctober 20, 2025: Monson-Kongsun restructuring Americas business unit and laying off staffOctober 1, 2025: General Mills to close three plants and take $82 million chargeSeptember 16, 2025: Ford to lay off up to 1,000 workers at German EV plantSeptember 3, 2025: Salesforce CEO says company has cut 4,000 support jobs due to AI “intelligent agents”August 29, 2025: Ford may cut about 470 jobs at two plants in South AfricaAugust 26, 2025: Kroger cuts 1,000 corporate positions for cost reductionJuly 16, 2025: Walmart cuts hundreds of store support and training jobsJuly 8, 2025: Intel lays off more than 500 workers in OregonJuly 2, 2025: Microsoft eliminates 9,000 jobs in its second round of mass layoffsJune 5, 2025: Procter & Gamble plans to cut 15% of office roles within two yearsJune 2, 2025: Disney continues to lay off hundreds of film staff amid industry troublesMay 29, 2025: General Mills says it will lay off staff as part of multi-year restructuring planMay 21, 2025: Walmart cuts about 1,500 technology team jobsMay 13, 2025: Ford to lay off about 350 workers in the U.S. and CanadaMay 13, 2025: Microsoft announces 6,000 layoffs company-wideApril 29, 2025: After Amazon divestment, UPS plans to cut 20,000 jobs this yearApril 23, 2025: Intel to announce layoff plan this week, ratio to exceed 20%March 5, 2025: Disney cuts 6% of staff from ABC TV and Entertainment divisionsFebruary 4, 2025: Salesforce lays off 1,000 people while hiring AI sales personnel

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