U.S. Job Cuts Hit 4-Year High as Layoffs Surge Across Key Sectors in 2024

December Job Cuts Fall, but Annual Layoffs Hit Four-Year High

U.S. employers announced 38,792 job cuts in December 2024, a 33% reduction from November but an 11% increase from December 2023, according to Challenger, Gray & Christmas, Inc. The year-end total reached 761,358 cuts, up 5.5% from 2023 and marking the highest annual figure since 2020, excluding the pandemic-driven surge.

Which Sectors Are Leading the Layoffs?

Technology firms continued to dominate layoffs, with 11,430 cuts in December and 133,988 for the year. However, this represented a 20.3% decline from 2023 as the sector adjusts to slower growth following rapid expansions in prior years. Utilities and energy sectors showed stark increases, with layoffs up 524.4% and 300.6%, respectively, highlighting cost-cutting and operational realignments. Similarly, the education sector saw a 177.9% spike, driven by institutional restructuring.

Notably, government job cuts surged to 38,375 for 2024, a staggering 1520.6% increase due to military reductions. Transportation and industrial manufacturing cuts also rose sharply, reflecting sectoral shifts tied to cost pressures and evolving demand dynamics.

Regional Layoff Patterns

Regionally, layoffs rose across most areas except the South, where they fell by 21% compared to 2023. The West reported the highest volume of cuts at 332,369, up 8.2%, with California accounting for nearly half. Texas, in contrast, saw layoffs climb significantly to 71,467 from 41,509. The Midwest experienced a modest increase, driven by job losses in Ohio and Iowa. The East region saw a 15.8% rise, led by significant cuts in the District of Columbia due to federal workforce reductions.

Annual Hiring Plans at Nine-Year Low

Employers announced 769,953 hiring plans in 2024, down 1.3% from 2023, marking the lowest annual total since 2015. While retail hiring surged due to seasonal and e-commerce demands, industries like energy, technology, and education remained hesitant, reflecting broader caution in response to economic uncertainty.

Market Outlook

The Challenger report underscores persistent uncertainty as sectors recalibrate in response to economic shifts and technological advances. For traders, the data suggests heightened sensitivity in employment-heavy sectors like technology, transportation, and energy. The report’s mixed signals—rising layoffs but stable hiring trends—indicate a cautiously bearish short-term outlook for labor-dependent equities and industries.

Traders should watch for continued volatility, particularly in regions and sectors undergoing structural transformations, such as the transition to renewable energy and automation-driven manufacturing shifts.