The Challenger Report: 1.2M Job Cuts in 2025, Hiring at a 15 Year Low, Q4 Cuts Highest Since 2008

December, on its own, looks reassuring. Employers announced 35,553 job cuts, down 50% from November and 8% lower than December 2024, the lowest monthly total in 17 months. December is often quiet, and this one was no exception.

But when you step back and look at the full ledger, the tone changes.

For all of 2025, employers announced 1,206,374 job cuts, up 58% from 2024 and the 7th highest annual total since 1989. That’s not noise. That’s a late cycle signal.

Where The Stress Is Hiding

The most telling number isn’t December. It’s Q4…

• Q4 2025 job cuts: 259,948
• Highest Q4 since 2008
• Up 71% from Q4 2024 and 29% from Q3 2025

Late in the year is when companies usually protect optics. When cuts accelerate there, it suggests boards are shifting from wait and see to lock it down.

The industry mix reinforces that read…

• Government: 308,167 cuts in 2025, up 703% YoY, heavily front-loaded in Q1, with clear downstream spillovers into contractors and nonprofits

• Technology: 154,445 cuts, still elevated as AI investment replaces headcount rather than complementing it

• Warehousing: 95,317 cuts, up 317% YoY, a classic throughput warning tied to softer goods movement and automation

• Retail: 92,989 cuts, up 123% YoY, consistent with trade down behavior and margin pressure

• Services: 74,796 cuts, up 68% YoY, which usually means businesses are cutting vendors before cutting themselves

That combination of government, logistics, retail, and services only clusters like this when demand visibility is deteriorating.

The Quietest Red Flag Is Hiring Plans

If layoffs are the visible part, hiring plans are the tell…

• Total planned hires in 2025: 507,647
• Down 34% from 2024
• Lowest annual total since 2010

Even more striking…

• Seasonal hiring plans in Q4: 372,520, the lowest since tracking began in 2012
• No new seasonal hiring plans announced in November or December

Companies don’t cut hiring this aggressively unless they’re worried about being stuck with excess labor later. This is a leading indicator, not a lagging one.

The Reasons Matter More Than the Count

When you look at why companies say they’re cutting, the picture sharpens…

• Market/Economic Conditions: 253,206 cuts
• Closings: 191,480
• Restructuring: 133,611
• Cost cutting: 81,392
• Bankruptcy related: 38,883
• AI related: 54,836 (since first tracked in 2023)

These aren’t one off restructurings. They’re balance sheet decisions. They’re cash flow decisions. They’re “we don’t trust next year” decisions.

My View

This doesn’t read like an economy in free fall. It reads like one quietly tightening its belt.

The pattern is consistent…

• Hiring plans collapse first.
• Vendors and service providers get hit next.
• Warehousing and retail cut as volumes soften.
• Core payrolls lag, which is why the labor market still looks “okay” in headline data.

That’s how downturns actually form, not with panic, but with restraint.

If you’re looking for confirmation or contradiction in 2026, watch hiring intentions, not just layoffs. When companies stop planning for growth, the rest usually follows.