### U.S. Job Cuts Surge to Highest Level Since 2020 Amid Economic Strain

Job cuts announced by U.S. employers in 2023 have surged to their highest levels since 2020, according to a new report. Upwards of 696,309 job cuts were reported this year so far, marking a significant rise driven primarily by Department of Government Efficiency cuts and weakening economic conditions.

The latest monthly report from Challenger, Gray & Christmas revealed that these job cuts are the highest since pandemic-related layoffs left over 1.4 million people unemployed during the first five months of 2020. Despite a slight dip in layoffs in May compared to April, May's layoffs were still 47% higher than those announced in May 2024.

Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, highlighted the factors contributing to the increase in layoffs. "Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies' workforces," he said. "Companies are spending less, slowing hiring, and sending layoff notices."

The Department of Government Efficiency (DOGE) accounted for more than one-third of the job cuts, not only through direct reductions in federal government staff and funding but also via the indirect "downstream impact" on organizations that lost government money and consequently had to cut jobs.

Several major companies are among those that have announced significant layoffs this year. Procter & Gamble (PG) recently disclosed plans to cut 7,000 non-manufacturing jobs over the next two years. Other companies such as Microsoft (MSFT), Morgan Stanley (MS), Walmart (WMT), and CrowdStrike (CRWD) have also announced substantial job cuts.

While the Challenger, Gray & Christmas report tracks published announcements, many economists, analysts, and investors turn their attention to official government jobs reports for a more comprehensive measure of labor market conditions. These reports, generally seen as more reliable, gather information directly from businesses and workers.