July layoffs hit lowest level in 2 years despite AI fears: report

Layoffs in July hit their lowest level in two years – a signal of a resilient labor market despite big financial shocks from the war in Iran and the rapid rise of artificial intelligence, according to a report Thursday.

US-based employers announced 33,429 job cuts in July – down 27% from the earlier month and 46% decrease than the same month last 12 months, Challenger, Gray and Christmas said in a new report.

So far this 12 months by way of July, employers have announced 477,033 job cuts – down 41% in comparison with the first seven months of 2025, according to the firm.

Layoffs in July hit their lowest level in two years – a signal of a resilient labor market, according to a report Thursday. Kaspars Grinvalds – stock.adobe.com

Companies are still shedding workers, however not as a lot as last 12 months – even as AI got here in as the leading reason for job cuts for the fifth consecutive month, Challenger said.

“The pace of layoffs fell dramatically this summer. Layoff plans continue to be announced primarily in tech, and artificial intelligence is still the story, as investments in the technology reshape organizations,” Andy Challenger, office professional and chief income officer for Challenger, Gray & Christmas, said in a assertion.

“Hiring has also increased over last year by 25%, so while AI is shifting the labor market, it is not dismantling it.”

So far this 12 months, AI has been cited in 112,713 job cut bulletins – including 10,970 in July, according to the report.

Since 2023, when Challenger began monitoring AI as a distinct reason for layoffs, the new tech has been linked to 184,538 job cuts.

In July, technology was the sector with the most job cuts, asserting 9,867 layoffs for a whole of 149,023 to date this 12 months.

Employers announced plans to rent 16,095 staff in July, according to the report. Getty Images

That’s 67% more layoffs than the same period last 12 months and just under a third of all job cuts in 2026.

“Tech remains the center of gravity for this year’s cuts, and AI is still the reason companies give,” Challenger said.

Financial corporations, authorities companies, companies, health care, transportation and media also noticed vital layoffs in June, the firm said.

Challenger also said hiring has picked up, after firms halted taking over new workers as they feared financial shocks from President Trump’s tariffs and the Middle East battle.

Employers announced plans to rent 16,095 staff in July – 47% larger than the earlier month and far larger than last July’s 3,200 new hires.

It’s the highest hiring whole for July since 2022.

So far this 12 months, firms have announced plans to rent 107,500 staff – up 25% from the same seven-month period last 12 months and the strongest whole since 2023, according to the report.

Aerospace and protection industries led hiring plans in July. Technology and automotive industries have also seen most of the hiring this 12 months.

The Bureau of Labor Statistics is scheduled to release its official jobs report on Friday. snowing12 – stock.adobe.com

“Employers are hiring more than they were at this point last year, which bucks the trend we’ve seen since 2020,” Challenger said. “The demand is showing up in aerospace, energy, and manufacturing, work that happens on a floor rather than a screen.”

However, Challenger’s report is just a assortment of hiring plans, not official authorities data.

The Bureau of Labor Statistics is scheduled to release its official jobs report on Friday morning, and economists count on it should show a increase in hiring after June’s surprisingly slow month.

June’s nonfarm payroll employment is estimated to leap by just 83,000 – an increase from 57,000 the earlier month. The unemployment price is forecast to stay unchanged at 4.2%.

On Wednesday, ADP launched its personal jobs report, which confirmed that hiring at personal corporations slowed dramatically in July – coming in below estimates.

Nonfarm job growth excluding authorities positions fell to 44,000 in July, below June’s downwardly revised 95,000 and lacking the forecast for 75,000 jobs.

All of the web job positive aspects got here from the companies sector, which added 47,000 jobs, while the goods-producing industry misplaced 3,000 roles.

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