US layoffs surge 245% as DOGE cuts hit federal workers and contractors
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The news: US employers announced 172,017 job cuts in February, a 245% increase from a year earlier and the highest since July 2020, according to Challenger, Gray & Christmas.
The numbers: Government layoffs accounted for 62,242 of these cuts, with reductions driven by the Trump administration’s Department of Government Efficiency (DOGE), led by Elon Musk.
Challenger attributed 63,583 layoffs to DOGE actions, including federal workforce cuts and contractor job losses. The ripple effects of DOGE, including funding cuts to private non-profits, resulted in an additional 894 planned job cuts, the firm said.
Separate data showed initial jobless claims fell by 21,000 to 221,000 last week, though continuing claims rose to an almost three-year high.
Meanwhile, data from the Commerce Department also showed Trump’s sweeping tariffs on Canada, Mexico and China spurred a rush to import goods, driving the US trade deficit up 34% in January to a record USD131.4 billion.
The context: The Trump administration is aggressively cutting government jobs, impacting contractors and private firms reliant on federal funding. The layoffs may not appear in February’s employment report but could affect future data.
The Trump administration’s policies are also prompting economists to rethink labour market forecasts for 2025, with estimates of up to 500,000 total job losses by year-end.
Comerica Bank, Evercore ISI and Barclays are among firms who say total job losses could top half a million by the end of the year.
The impact of these cuts and tariffs may become more apparent in March and April, with potential effects on private-sector services providers, Bloomberg noted.
The sources: Challenger, Gray & Christmas , US Department of Labor
