US layoff plans drop at end-2025, with more hiring to come

[NEW YORK] US companies announced fewer layoffs last month while planning more hiring, potentially easing fears of a sharper slowdown in the labour market.

Companies announced 35,553 job cuts in December, the lowest since July 2024, and down substantially from elevated readings in the prior two months, indicated data from outplacement firm Challenger, Gray & Christmas.

Additionally, employers laid out plans to add nearly 10,500 jobs, the highest for any December since 2022. The data was released ahead of schedule, after it became accessible on the Challenger website.

While December is typically a month with fewer layoff plans, the drop in job-cut announcements, plus greater hiring intentions, “is a positive sign after a year of high job-cutting plans”, said Andy Challenger, the firm’s chief revenue officer.

The figures signal some momentum for the labour market heading into the new year after a notable slowdown in 2025.

Planned layoffs topped 1.2 million last year, the most since 2020 and led by the federal government. In the private sector, technology, warehousing and retail also saw pickups from 2024.

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While hiring plans ended the year on a strong note, 2025 was still the lowest since 2010. Retail and transportation companies pulled back sharply compared to the prior year, as did the energy and construction industries.

Data out on Wednesday (Jan 7) from the Institute for Supply Management also provided some encouragement at the year’s end, with US services providers registering the strongest growth in employment last month since February.

However, the group’s measure of headcount among manufacturers shrank for an eleventh straight month, albeit at a slower pace. BLOOMBERG