US layoffs surge to 1.17 million in 2025
Layoffs in the United States reached 1.17 million in 2025, a sharp rise that has unsettled workers, employers and policymakers. While many factors drove the wave, artificial intelligence (AI) was directly tied to roughly 55,000 job cuts — about 4.7% of the total. Large employers in the technology space, including major names that have dominated hiring in recent years, moved ahead with significant reductions.
How AI contributed to job cuts
AI did not cause the entire surge, but it played a visible role in certain decisions. Companies increasingly automate repetitive tasks, use machine learning to streamline workflows, and deploy generative tools for content and code. In some cases this meant fewer roles were needed; in others, teams were restructured so fewer people handle the same or equivalent work.
Importantly, AI-related layoffs tended to target positions with routine or repetitive responsibilities. Other roles — those that require deep domain expertise, complex judgment, relationship-building, or creative leadership — have been harder to replace and often remained in demand.
Sectors and companies most affected
The layoffs were concentrated in several sectors, with notable patterns:
- Technology: Broad reorganization and automation initiatives led to large reductions at some major tech employers.
- Retail and logistics: Efficiency drives and changing consumer patterns pushed employers to re-evaluate staffing models.
- Finance and professional services: Firms cut roles tied to back-office processing and routine analysis.
- Media and marketing: AI tools for content generation reduced demand for some junior content roles.
Large companies have publicly announced significant layoffs as they shift priorities. These moves underline how even industry leaders are balancing growth strategies with cost management and technology adoption.
Why companies are cutting jobs now
Several broader reasons came together in 2025:
- Cost pressures: Slower revenue growth in parts of the economy forced companies to lower expenses.
- Overhiring after the pandemic: Some firms expanded quickly during recovery and later found staffing levels unsustainable.
- Strategic shifts: Businesses reallocated resources toward AI, cloud, and other priority areas, reducing investment in less strategic units.
- Operational efficiency: New software and automation reduced the need for routine human tasks.
The human side: what affected workers face
Behind the numbers are people navigating lost income, uncertainty and career transitions. Some common challenges include longer job searches in competitive fields, gaps in employer-provided benefits, and the stress of sudden change. Relocation may be necessary for those whose skills are concentrated in regions hit hardest by cuts.
At the same time, many displaced workers are exploring new paths: reskilling, freelancing, entrepreneurship, or pivoting to roles that complement AI tools rather than compete with them.
Practical steps for workers right now
Workers facing layoffs can take practical actions to improve outcomes:
- Assess transferable skills: Identify strengths that apply across industries — project management, data analysis, client relationships.
- Invest in learning: Short courses in AI tooling, cloud platforms, data literacy or industry-specific skills can make candidates more competitive.
- Update your network and resume: Reach out to former colleagues, attend industry events, and tailor applications to highlight measurable impact.
- Consider contract or freelance work: Short-term roles can bridge income gaps and broaden experience.
- Use available supports: Explore unemployment benefits, job placement programs and community resources early.
What employers and policymakers should consider
Companies and governments can reduce harm and increase long-term value by planning responsible transitions:
- Transparent communication: Clear explanations about why changes are happening help preserve trust.
- Reskilling programs: Funding training and internal mobility can keep talent within companies and speed rehiring.
- Phased automation: Gradual change with human oversight reduces disruption and preserves institutional knowledge.
- Stronger social safety nets: Enhanced benefits and job-search assistance can soften the economic shock for workers.
Looking ahead: what 2026 may bring
The coming year will test whether the job market stabilizes or continues to shift rapidly. A few likely outcomes:
- AI will keep changing how work is done, increasing demand for workers who can design, manage and apply AI — not just those it replaces.
- Some sectors may recover and rehire as demand returns, while others will see permanent workforce reductions as processes are automated.
- Companies that pair automation with investment in people — reskilling and redeployment — will be better positioned to retain talent and reputation.
For workers and leaders alike, adaptability will be essential. The 2025 surge in layoffs is a reminder that technological change and economic pressures can reshape careers quickly. The choices companies make now about how they adopt AI and support displaced workers will influence both economic outcomes and public trust for years to come.