US-based employers announced 33,429 job cuts in July, marking the lowest level in two years and a substantial decrease from previous periods. This figure represents a 27% drop from June and a 46% decrease compared to July of the previous year, according to a report from Challenger, Gray and Christmas.
For the first seven months of the year, job cuts totaled 477,033, a 41% decrease compared to the same period in 2025. While layoffs continue, their pace has slowed considerably over the summer. The technology sector remains a primary source of job reductions, with artificial intelligence cited as the leading reason for these cuts for the fifth consecutive month.
"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," said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas. "Hiring has also increased over last year by 25%, so while AI is shifting the labor market, it is not dismantling it."
AI has been cited in 112,713 job cut announcements this year, including 10,970 in July. Since 2023, when AI began to be tracked as a distinct reason for layoffs, it has been linked to 184,538 job cuts. The technology sector led in job cuts in July, announcing 9,867 layoffs, contributing to a year-to-date total of 149,023. This represents a 67% increase in layoffs for the tech sector compared to the same period last year.
Beyond technology, financial firms, government agencies, services, health care, transportation, and media also experienced significant layoffs in June, the firm noted. Challenger also observed an uptick in hiring, which had previously slowed as companies navigated economic uncertainties related to geopolitical conflicts and trade policies.
Employers announced plans to hire 16,095 workers in July, a 47% increase from June and a significant rise from the 3,200 new hires in July of the prior year. This marks the highest hiring total for July since 2022. Year-to-date, companies have announced plans to hire 107,500 workers, a 25% increase from the first seven months of 2025 and the strongest total since 2023.
Aerospace and defense industries led hiring plans in July. The technology and automotive sectors have also seen substantial hiring activity this year. "Employers are hiring more than they were at this point last year, which bucks the trend we’ve seen since 2020," Challenger stated. "The demand is showing up in aerospace, energy, and manufacturing, work that happens on a floor rather than a screen."
Challenger's report, which compiles announced hiring plans, precedes the official jobs report from the Bureau of Labor Statistics scheduled for release. Economists anticipate this official report will indicate a boost in hiring for July, following a slower-than-expected performance in June. Economists forecast nonfarm payroll employment to increase by 83,000 in July, an improvement from the 57,000 jobs added in June. The unemployment rate is projected to remain steady at 4.2%.