Job cuts nationwide are the highest in five years, led by layoffs in California and cuts in Washington.
California employers announced 173,022 job cuts from January to November, nearly 14% more than the same period last year, according to the latest monthly report from outplacement firm Challenger, Gray & Christmas.
Nationally, the total number of cuts increased 54% to 1.17 million, Challenger, Gray & Christmas said in the report released Thursday.
It is the highest level since 2020, when COVID forced mass layoffs. The last time national job cuts were this high without a pandemic was in 2009.
Much of California's economy can be divided into high-growth regions like Los Angeles and parts of the Bay Area, fueled by a surge in venture capital investment, while other regions are being hit by tariffs, political uncertainty and a government crackdown on immigrant labor, according to UCLA's Anderson Forecast, released earlier this week.
Nearly 70% of all U.S. venture capital spending flowed into California in the first half of this year, according to the forecast. Los Angeles and Orange counties are attracting big funds to the aerospace and defense industry, while the Bay Area continues to absorb major investments in artificial intelligence, widening the gap between capital-rich technology centers and more vulnerable regions.
California has been experiencing a storm of restructuring in two of its largest business centers: Hollywood and Silicon Valley.
The layoffs have been driven by economic uncertainty, plus a shrinking entertainment industry and a radical rethinking of technology brought on by the dawn of the AI era.
Thousands of workers at Intel, Salesforce, Meta, Paramount, Walt Disney Co. and elsewhere have lost their jobs. Even Apple has announced a rare round of reductions.
Workers are nervous as apparently no corner of the California economy has been immune to cost cutting.
The Trump administration's initiative to cut government spending (through what it calls the Department of Government Efficiency, also known as DOGE) was the biggest driver of the government job cuts. At the same time, economic distress and technological change weighed on the private sector.
California's tech industry announced 75,262 job cuts, the most of any industry in the Golden State this year.
As the race to master AI intensifies, companies are laying off workers while investing in other areas or trying to move faster with fewer middle managers.
Nationally, technology companies have said they are cutting 153,536 jobs this year through November.
No other industry came close to that total, although the automotive, consumer products, financial and healthcare sectors each announced more than 40,000 job cuts, according to the report.
The main reason cited by companies for cutting jobs was restructuring. Store closures, economic and market conditions and artificial intelligence were also mentioned.
Tech companies have been launching more AI-powered products that can generate text, images, code and other content, raising fears among workers across industries that their jobs could be automated.
Since 2023, AI has been cited in 71,683 job cuts, according to Challenger, Gray & Christmas.
At the same time, some technology companies are announcing hiring plans even amid the cuts. Tech employers have also announced 258,084 planned hires from January to November, up from 14,707.
There were signs that layoffs were slowing, with totals for the month of November lower than last year.
That could mean that companies have stopped downsizing. It could also mean that some companies are taking a break from job cuts during the holidays, when laying off people is bad for a company's brand.
“Layoff plans fell last month, certainly a positive sign,” Andy Challenger, workplace expert and chief revenue officer at Challenger, Gray & Christmas, said in a news release.
“It was the trend to announce layoff plans toward the end of the year, to align with most companies' fiscal year ends,” he said. “It became unpopular after the Great Recession, especially, and best practices dictated that layoff plans would occur at times other than holidays.”
