US Challenger Report: Job cuts tumble but hiring plans weaken sharply

US-based employers announced 48.307K job cuts in February, sharply lower than in January and a year earlier.
Despite the monthly drop in layoffs, hiring plans have fallen 56% since the start of the year.
Financial markets showed little reaction following the report’s release.

Ghiles Guezout FXStreet

US-based employers announced 48.307K job cuts in February, according to data released Thursday by Challenger, Gray & Christmas. The figure represents a 55% decline from the 108.435K layoffs announced in January and a 72% drop compared with the 172.017K job cuts recorded in the same month last year.

In total, employers have announced 156.742K layoffs during the first two months of the year. This marks the lowest January-to-February total since 2022, although it still ranks among the highest early-year totals recorded since the global financial crisis of 2009.

Andy Challenger, Chief Revenue Officer at Challenger, Gray & Christmas, warned that the improvement may prove temporary. He noted that rising economic and geopolitical uncertainty, particularly linked to the growing conflict involving Iran, could lead companies to tighten spending and announce additional layoffs toward the end of the first quarter.

Companies most frequently cited store or unit closures, market and economic conditions and corporate restructuring as the primary reasons for job cuts. Artificial Intelligence was also mentioned as a factor in 4.680K layoffs announced in February.

At the same time, hiring intentions remain significantly weaker. Employers have announced plans to hire 18.061K workers so far this year, representing a 56% decline compared with the same period in 2025, highlighting the cautious stance of companies amid uncertain economic prospects.

Market reaction

The report had little impact on financial markets, with the US Dollar Index (DXY) trading around 98.90 on Thursday at the time of writing, up 0.10% on the day.

Economic Indicator

Challenger Job Cuts

Challenger Job Cuts, released by Challenger, Grey & Christmas monthly, provides information on the number of announced corporate layoffs by industry and region. The report is an indicator used by investors to determine the strength of the labor market. Usually, a high reading is seen as negative (or bearish) for the US Dollar (USD), while a low reading is seen as positive (or bullish).

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