October sees biggest wave of layoffs in over two decades: Report

US employers announced more than 153,000 job cuts in October — the highest number in 22 years — sending shockwaves through Wall Street and heightening concerns about the strength of the labour market.

According to outplacement firm Challenger, Gray & Christmas, the total of 153,074 layoffs represented a 183% increase from September and the worst October figure since 2003. Business Insider reported that the data rattled investors, triggering a sharp sell-off across major indices on Thursday.

The Dow Jones Industrial Average fell nearly 400 points, or 0.84%, while the S&P 500 dropped 1.12%. The Nasdaq Composite led declines, slipping about 1.9% as investors pared back exposure to high-growth technology names.

Tech heavyweights bore the brunt of the sell-off: Nvidia slid 3%, Microsoft and Meta both shed around 2%, and Palantir fell nearly 7%. The Roundhill Magnificent 7 ETF, which tracks the biggest US tech firms, was down almost 2%. Bloomberg data showed the S&P 500 closing at 6,720.39 as traders digested the layoff numbers.

Challenger’s report indicated that the technology sector accounted for 33,281 layoffs in October — over five times the number seen in September. The cuts, the firm said, stemmed from slower demand, AI-driven restructuring, and cost pressures following the pandemic-era hiring boom.

“Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes,” said Andy Challenger, the company’s chief revenue officer.

The spike in job cuts contrasts with other indicators suggesting modest resilience. Payroll processor ADP reported that the private sector added 42,000 jobs in October — nearly double economists’ expectations. However, the Challenger data remains one of the few timely measures available to investors amid disruptions from the ongoing government shutdown.

Despite the grim labour data, markets found a small silver lining. Traders are increasingly confident that the Federal Reserve will move to cut interest rates before year-end. The CME FedWatch tool showed a 70% probability of a December rate cut of 25 basis points, up from 62% the previous day.

The latest wave of layoffs underscores the fragility of the post-pandemic recovery, particularly in sectors that had expanded rapidly during the boom. With valuation worries weighing on tech stocks and corporate spending softening, analysts warn that employers may continue to tighten their belts into early 2026.