In February 2023, job cuts in the United States reached a staggering total of 172,017 positions, the highest monthly total since July 2020. The increase in layoffs has been primarily driven by significant workforce reductions in the government sector, as reported by Challenger Gray & Christmas. This represents a remarkable 245% surge in layoffs compared to the previous month and a 103% increase year-over-year.
Andrew Challenger, senior vice president of Challenger Gray & Christmas, emphasized that 'Private companies announced plans to shed thousands of jobs last month, particularly in retail and technology.' The weight of actions from the Department of Government Efficiency (DOGE) and cancellations of government contracts, along with fears of trade wars and an uptick in bankruptcies, have collectively fueled the rise in job cuts throughout February. The government sector was the hardest hit, revealing a reduction of 62,242 jobs across 17 agencies, closely followed by substantial layoffs in the retail sector, which accounted for 38,956 job reductions.
Additionally, the technology industry contributed significantly with 14,554 layoffs. According to the report, terminations resulting from the 'DOGE impact' led the reasons for job reductions this year, equating to 63,583 layoffs. Other reasons cited included unfavorable market and economic conditions that accounted for 36,257 cuts, while bankruptcy led to 35,411 layoffs. In an executive move, President Donald Trump established the Department of Government Efficiency (DOGE) to streamline government operations; however, it appears that the administration is gearing up to cut even more jobs.
As stated by Andrew Challenger, 'It appears the administration wants to cut even more workers, but an order to fire the roughly 200,000 probationary employees was blocked by a federal judge.' The implications of these actions on the employment landscape remain to be fully realized in the coming months. On a slightly positive note, despite these significant layoffs, companies have increased their hiring plans to 34,580 workers in February, a notable rise from the aim of employing 6,089 new positions the previous month, and from 10,317 a year earlier. The Bureau of Labor Statistics is anticipated to report that the US economy added 160,000 nonfarm jobs in February, marking an increase from a prior gain of 143,000 jobs the month before, according to a Bloomberg-compiled survey..