Challenger, Gray & Christmas report showed layoffs in US rising to five-year record high

US employers have already cut 696,309 jobs this year, according to a report from Challenger, Gray & Christmas. That's the highest since 2020, when more than 1.4 million people were out of work due to the pandemic. The figure for May was lower than the April reading, but 47% higher than data from the same period in 2024.

According to Andrew Challenger, vice president of the company, the pressure on employers comes from tariffs, lower consumer spending, and general pessimism in the economy. However, the US Department of Government Efficiency believes that more than a third of the layoffs are due to the direct or indirect impact of cuts in government funding and personnel in government organizations.

The report takes into account published announcements of job cuts and displays data for a number of large companies that have recently reported layoffs. Among those organizations, the latest was Procter & Gamble, which this week announced plans to cut 7,000 jobs. Microsoft, Morgan Stanley, and Walmart also reported layoffs.

In this regard, the official US government payrolls report, which is to be released today, is particularly interesting. It will provide a more comprehensive picture of the state of the labor market in May.