The job market is weakening, says another report

More employment data released on Thursday showed the labor market continued to trend downward in July.

U.S. employers laid off 25,885 workers in July, down 47% from the previous month, according to a monthly report from employment firm Challenger, Gray & Christmas. However, compared to the same period last year, the number of dismissals increased by 9% and was the highest in July since 2020.

The report also showed that U.S. employers slowed their hiring plans. Employers planned to hire 3,676 new workers in July, the lowest monthly number since December and the lowest July number in data dating back to 2009.

“The labor market is indeed cooling, with hiring at its lowest level in more than a decade. While we see an increase in cuts in manufacturing, both consumer and industrial, most industries are cutting below year-ago levels,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas.

The report comes after recent employment reports indicated the labor market may be weakening, including a lower-than-expected private-sector employment report in July. The Bureau of Labor Statistics will release additional labor market data on Friday.

Technology sector leads in job cuts

The technology sector led the job losses and continues to lead all sectors in job losses this year. The service sector and food manufacturers also announced significant job cuts in July.

“The technology industry in particular is going through a huge amount of change. Given the revenue losses and years of heavy hiring at many of these companies, it’s no surprise that this industry is leading the way in job cuts,” Challenger said.

Cost-cutting is the leading cause of layoffs, the study found, while market conditions and department closures also contributed significantly to job losses at companies. “Technology updates,” including artificial intelligence, were not cited as a reason for job cuts and have not been since April, the report noted.