Roughly 62K of the 172K jobs cuts in February were federal government jobs.
With the Bureau of Labor Statistics set to release the unemployment report and nonfarm payrolls on Friday, a new report details how brutal February was in the job market.
The Challenger Report, produced by executive search firm Challenger, Gray & Christmas, said this was the worst month for layoffs in almost five years.
U.S. employers announced plans to cut 172,017 jobs in February, which is the most for a month since July 2020, during the pandemic, when 262,649 job cuts were announced. It is also the most for the month of February since February 2009, in the middle of the Global Financial Crisis, when 186,350 jobs were eliminated.
Further, the 172,017 job reductions are 103% more than the 84,638 cuts announced in February of 2024, and 245% more than January, when 49,795 layoffs occurred.
Through the first two months of the year, employers have announced 221,812 job cuts. That is the highest year-to-date (YTD) total since 2009 when 428,099 job cuts were planned. It is 33% than the 166,945 cuts announced during the same period in 2024.
“Private companies announced plans to shed thousands of jobs last month, particularly in Retail and Technology. With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,“ Andrew Challenger, senior vice president at Challenger, Gray & Christmas, said.
62,000 government jobs are axed
Not surprisingly, most of the announced cuts were federal jobs, according to the Challenger report. This reflects the massive layoffs that have resulted from the Elon Musk-led DOGE.
The report said there were 62,242 announced job cuts by the federal government across 17 different agencies last month.
“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. It remains to be seen how many more workers will lose their Federal Government roles,” Challenger said. “When mass layoffs occur, it often leaves remaining staff feeling uneasy and uncertain. The likelihood that many more workers leave voluntarily is high.”
The government has cut 62,530 jobs so far this year through February, an increase of 41,311% from the 151 cuts announced through February 2024.
In the private sector, retail jobs took the biggest hit. Retailers eliminated 38,956 jobs in February and 45,375 through the first two months. That is a 572% increase from the 6,751 retail jobs that were axed in the first two months of 2024.
In the technology sector, 14,554 job cuts were reported in February with 22,042 cuts so far in 2025. That is actually 22% lower than the 28,218 cuts announced during the same period last year.
Further, there have been 13,804 job cuts in the services industry through February, up slightly from 13,503 in 2024. And cuts among consumer products manufacturers jumped to 12,947 through February, with 10,625 of those cuts coming in February. The total through February is up 95% year-over-year.
Finally, the media industry saw 67% fewer job cuts through February compared to last year with 1,557 so far. It is the lowest January-February total for the industry since 2022.
Robust hiring expected in 2025
In the report, “DOGE Impact” was cited as the primary reason for job cuts, accounting for 63,583 layoffs to federal workers and contractors. Further, a loss of funding to private non-profits contributed to another 894 job cuts.
In addition, market/economic conditions were attributed to 36,257 cuts, while bankruptcy was cited as the reason for 35,411 cuts. Finally, store, unit, or plant closing has been the cause of 28,095 job cuts so far this year.
The good news is that companies plan to boost their hiring activity in 2025. In February, companies announced plans to hire 34,850 workers. Through the first two months of the year, the number of new hires is pegged at 40,669. That represents an increase of 159% from the same period last year. It is the most planned hires for the month of February since 2022.
The entertainment/leisure sector intends to hire 28,000 new workers, while the automotive industry is looking to add 4,831 new workers this year. The technology sector has announced plans to hire 3,225 new workers so far in 2025.
The BLS’s unemployment and jobs report will be released on Friday, with economists expecting 177,000 new jobs added in February. The raft of federal job cuts in February are not projected to have a major impact on the numbers this month but may show up in the coming months.
