Job cut announcements dropped to a 17-month low in December, per figures released this week by outplacement firm Challenger, Gray & Christmas. Communities are still reeling from a chaotic labor market since then-President Donald Trump ordered sweeping tariffs back in April 2025. This announcement crushed hiring and employment in almost every industry, resulting in one of the worst declines ever. While layoffs are down, the job market is still a place of volatility, making it hard for workers to feel secure, let alone produce positive net job creation.
Last month, based on announcements from employers, there were plans for 35,553 layoffs. In very strong counterpoint, hiring announcements jumped to their highest level for December since 2022. Together, these statistics paint a complicated picture. Collectively, companies are sending a message that they are in a new era of very careful and deliberate workforce management.
Decreased Job Cuts Amidst Economic Uncertainty
The significant decline in planned job cuts to a 17-month low provides a ray of optimism for the labor market. The year concluded with the fewest planned layoffs announced. While December is typically a slower month, combined with the heightening hiring intentions, this points to a positive reversal after a year dominated by major home layoff,” said Andy Challenger, noted labor market analyst.
Before raising a glass to this positive development, the shadow of economic uncertainty looms large. In December, the expected chances of getting a job sank to an all-time low of 43.1%. This worrisome figure is a finding from the Federal Reserve Bank of New York’s most recent Survey of Consumer Expectations. Job security is shaping up to be a major concern among respondents. Indeed, their expectations of experiencing job loss have reached the highest mean expected chance since April 2025.
For the better part of the last year, extreme uncertainty held back hiring. In some industries it even resulted in net job losses. Despite this, the labor market has been very slowly growing. On top of that, companies feel the heat of external economic pressures, causing many to reevaluate their hiring strategies.
Job Gains and Unemployment Trends
The unemployment rate should tick down to 4.5% after having reached a four-year high of 4.6% in November. Total net new jobs expected by 2025 will only total 710,000. This modest bump is an indicator of a long, uphill recovery from the lost jobs due to COVID-19. Tinsley had taken a somewhat optimistic view of the labor situation. He pointed out that while the labor market remains in a low-hire or low-fire position, our data indicates that at least the worst of the slowdown is over.
In November, U.S. businesses slowed their recruitment efforts. As such, hiring activity dropped to its lowest rate in more than 10 years, outside of the pandemic effect. This trend is worrisome both for broader economic growth and for consumer spending in the months ahead.
From the very beginning in April of 2025, health care and leisure & hospitality industries were booming. In fact, they beat the rest of the labor market by creating more monthly net new jobs over those eight months. Nela Richardson commented on this trend: “Health services is an expensive type of service for most consumers; leisure and hospitality [spending] is a discretionary service for all consumers.” These industries have painted such a clear picture of the K-shaped recovery, with increased spending by higher-income consumers while lower-income segments are still fighting to get by.
Looking Ahead: Predictions and Challenges
As analysts turn their eyes to the upcoming employment landscape, consensus estimates point to a gain of about 55,000 jobs in December. This second projection is especially important, as taken together, they’re a powerful testament to both the resilience and erosion of our labor market. Even with layoffs decreasing and an influx of jobs possible, the mood here is clearly tempered with caution.
Employers have shown a savvy hand in balancing the workforce against the backdrop of continued economic stressors. We’re hearing that the hiring landscape is beginning to feel a bit rosier. There are still big question marks over how easily companies can pivot and thrive in this new landscape.