Mass Layoff Warnings Climb to Highest Level in Nearly a D...

By Hugh Cameron

U.S. News Reporter

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Mass layoff notices are climbing to unsettling levels, a new study has found, indicating that the labor market may be shifting away from the "low hire, low fire" phase described by Fed Chair Jerome Powell and toward an all-around weaker employment landscape.

According to a recent analysis by Goldman Sachs, Worker Adjustment and Retraining Notification (WARN) alerts, which employers must issue before conducting mass layoffs, have ticked up in recent weeks. Outside of the initial spike which occurred during the pandemic, the bank said these are now at their highest level since 2016.

Why It Matters

The labor market has been largely frozen in 2025, with low levels of both hiring and layoffs leading to Powell’s "low hire, low fire" diagnosis in September. This equilibrium has given economists tepid confidence about the country’s prospects given the potential impacts of a surge in job cuts—Mark Zandi of Moody’s previously describing low layoffs as the "firewall" against a full-blown recession.

However, several studies are now showing an acceleration in layoffs, which Goldman views as especially concerning given the currently weak pace of hiring in the U.S.

What To Know

In addition to WARN alerts, Goldman’s economists analyzed earnings calls from Russell 3000 firms, finding that "the share of companies mentioning layoffs has increased recently." In conversations about staffing levels, artificial intelligence has also emerged as a major theme, with "about half of layoff-focused discussions in the last two reporting quarters in the tech sector" including references to the technology.

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In reaching its conclusion that there are "growing signs of weakness in the U.S. job market," Goldman cited the recent report from outplacement firm Challenger, Gray & Christmas which revealed that American employers announced 153,074 job cuts in October, up 175 percent from a year prior and a 183 percent increase from September’s figure.

"This comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes," wrote workplace expert Andy Challenger.

Through October, employers have announced 1.1 million cuts, the firm found, up 65 percent from 664,839 in the first ten months of 2024 and already 44 percent higher than last year's total of 761,358.

"Year-to-date job cuts are at the highest level since 2020 when 2,304,755 cuts were announced through October," the report continued.

What People Are Saying

Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei wrote in the report: "A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs."

Economist Justin Wolfers posted to X this week: "Unemployment has been rising ‘a tenth of a point here, a tenth of a point there.’ That feels small month to month, but as it has added up month over month, we've silently shifted from a very tight market toward a noticeably weaker one."

What Happens Next

Goldman pointed out that actual layoff figures still remain low. According to the most recent report from the Labor Department, 216,000 Americans filed for unemployment benefits last week, down from 222,000 a week prior and below forecasts of 224,000 jobless claims.

However, WARN notices are typically issued 60 days in advance of actual layoffs, and Goldman said that the announcements cited by Challenger, Gray & Christmas are also likely to precede the corresponding cuts by around two months.

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