Mass layoff notices are climbing to unsettling levels, suggesting the labor market may be moving out of the “low hire, low fire” phase described by Federal Reserve Chair Jerome Powell and toward a more broadly fragile employment environment.
According to a recent analysis by Goldman Sachs, Worker Adjustment and Retraining Notification (WARN) alerts—formal notices employers must file before large-scale layoffs—have risen in recent weeks. Aside from the initial spike during the pandemic, Goldman says these notices are now at their highest level since 2016.
Why It Matters
Throughout 2025, the job market has appeared frozen in place, with both hiring and firing running at unusually low rates. That pattern led Powell to describe conditions in September as “low hire, low fire,” a balance that gave economists some cautious optimism. Low layoffs, in particular, were seen as a key buffer against a deeper downturn, with Moody’s Mark Zandi previously calling them a “firewall” against a full-blown recession.
Now, however, several data points suggest layoffs are accelerating. Goldman views this as especially troubling given that hiring is already weak, meaning workers who lose their jobs may struggle more than usual to land new positions.
What To Know
Beyond WARN alerts, Goldman’s economists dug into corporate earnings calls from Russell 3000 companies and found that “the share of companies mentioning layoffs has increased recently.” In discussions about staffing, artificial intelligence is increasingly part of the story: in the tech sector, “about half of layoff-focused discussions in the last two reporting quarters” included references to AI.
In assessing signs of strain in the job market, Goldman cited an October report from outplacement firm Challenger, Gray & Christmas. The firm said U.S. employers announced 153,074 job cuts that month—up 175 percent from a year earlier and 183 percent higher than September’s tally.
“This comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” wrote workplace expert Andy Challenger.
From January through October, Challenger found, employers have announced 1.1 million job cuts. That’s 65 percent more than the 664,839 cuts recorded during the same period in 2024 and already 44 percent above last year’s full-year 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 noted.
What People Are Saying
Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei warned in their note: “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 echoed those concerns in a post on X this week, writing: “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
For now, actual layoff figures remain relatively subdued. The latest report from the Labor Department shows that 216,000 Americans filed for unemployment benefits last week, down from 222,000 the week before and below forecasts of 224,000 claims.
Still, WARN notices are typically filed about 60 days before layoffs occur. Goldman also noted that the job cuts announced by Challenger, Gray & Christmas tend to show up in the official data with a lag of roughly two months. Taken together, the recent surge in warnings and announcements could be an early signal that the calm in the labor market is about to give way to a more turbulent period for U.S. workers.
