Layoffs accelerate as Trump economy flashes red warning signs

Several major US corporations in the last month have announced plans to cut thousands of workers as layoffs in the American economy have reached their highest level since 2020, when much of the global economy was shut down due to the Covid-19 pandemic.

As reported by Bloomberg on Monday, major firms including Target, Amazon, Paramount, and Molson Coors in October announced plans to lay off a combined total of more than 17,000 workers for a wide variety of reasons ranging from the impact of artificial intelligence to declining sales.

Taken together, these layoffs point to a significantly weakened labor market, which had already ground to a halt over the summer when the last jobs report released by the Bureau of Labor Statistics (BLS) showed the economy created just 22,000 jobs in the month of August.

And while the BLS has stopped releasing monthly employment reports during the ongoing shutdown of the federal government, Bloomberg pointed to data collected by outplacement firm Challenger, Gray & Christmas showing that there have been “almost 950,000 US job cuts this year through September, the highest year-to-date total since 2020—and that was before the heavy October run of announcements.”

Dan North, senior economist at Allianz Trade Americas, told Bloomberg that he has detected a definite shift in the jobs market in recent weeks.

“We’re not just in a low hire, low fire environment anymore,” he explained. “We’re firing.”

Joseph Brusuelas, chief economist at RSM US, said in an interview with Reuters that he also expected the labor market to get worse in the coming months due to “adverse policy shocks emanating from Washington,” as well as “the change in behavior among corporates who hoarded labor for the past four to five years,” and were thus reluctant to carry out layoffs.

“That was never an indefinite behavior,” he said. “We’re going to see migration up in the unemployment rate.”

John Challenger, CEO of Challenger, Gray & Christmas, told CBS News last week that he didn’t think that the layoffs announced over the last month were just a blip.

“These are major layoffs, the kind of which we only see in periods of real change in the economy,” he emphasized.

One challenge for economists in assessing the current state of the economy is the vast gulf between the experiences of America’s highest-earning households and households at the bottom of the economic ladder.

According to a Monday report from CNBC, recent corporate earnings reports have shown signs of a so-called “K-shaped” economy in which well-off consumers are maintaining or increasing their spending while low-income consumers are being forced to cut back.

“Last week, Chipotle reported it’s seeing consumers who make less than $100,000 a year, which represents roughly 40% of the company’s customer base, spending less frequently due to concerns about the economy and inflation,” CNBC noted. “Coca-Cola said in its third-quarter earnings that pricier products like Topo Chico sparkling water and Fairlife protein shakes are driving its growth. Procter & Gamble reported similar results, saying wealthier customers are buying more from club retailers, which sell bigger pack sizes, while lower-income shoppers are significantly pulling back.”

A Monday report from Fortune similarly picked up on evidence that the US is in the midst of a K-shaped economy, as it found that the percentage of Americans taking on subprime loans in the third quarter of 2025 reached its highest level since 2019.

This is significant, Fortune noted, because an increased reliance on subprime loans “adds to signs that many are facing increased financial pressure” to make ends meet. What’s more, Fortune pointed to a recent analysis from Moody’s showing that the top 20% of households in the US are now responsible for economic growth, while the bottom 80% have essentially been stagnant.

Lucia Dunn, an economist at Ohio State University, told Fortune that this economic disparity could increase instability if not addressed.

“We are losing the middle class,” Dunn said. “And when you get to a society where there are a lot of people at the bottom and then a small group at the top, that’s a prescription for real trouble.”

The reports of the layoffs in corporate American come as a new analysis released Monday by Oxfam offered the latest look at extreme wealth inequality in the US, with the the 10 wealthiest Americans gaining nearly $700 billion so far this year—and as millions of people have lost crucial federal food assistance due to the government shutdown and the Trump administration’s refusal to release full benefits.