Planned job cuts announced by U.S. employers surged by 245% in February to 172,017, the highest level seen since the COVID-19 downturn in July 2020 and the steepest February total in 16 years, according to global outplacement firm Challenger, Gray & Christmas.
Government layoffs accounted for a significant portion of the job cuts, with 62,242 positions announced across 17 federal agencies. In total, about 62,530 federal employees were laid off during the first two months of the year—a dramatic increase compared to the same period in 2024. Andrew Challenger, senior vice president at Challenger, Gray & Christmas, warned that mass layoffs often leave remaining staff feeling uneasy and could lead to additional voluntary departures.
A key factor behind the surge in layoffs has been the aggressive cost-cutting drive led by the Department of Government Efficiency (DOGE), an initiative reportedly championed by tech billionaire Elon Musk and supported by the Trump administration. The DOGE effort has resulted in deep spending cuts, funding freezes, and the dismissal of thousands of federal workers, including specialists such as scientists and game rangers. The initiative has also affected federal contractors, as companies facing tariffs and other trade disruptions have extended their workforce reductions.
Challenger attributed 63,583 of the layoffs directly to the "DOGE impact," with an additional 894 job cuts linked to downstream effects such as reduced funding for private non-profits. The majority of the federal layoffs have been concentrated in Washington, D.C.—a region that has lost 61,795 jobs so far this year, compared with only 60 in 2024.
Outside of the public sector, job cuts were also reported in retail, technology, services, and consumer products industries. Although these federal workforce reductions will not immediately be reflected in February's employment report, scheduled for release on Friday, the ongoing hiring and funding freezes could influence government and contractor employment in the coming months. A Reuters survey of economists estimated that nonfarm payrolls increased by 160,000 jobs after a January rise of 143,000, with the unemployment rate remaining steady at 4.0%.
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