Employers slashed 153,074 jobs last month, up 175% from a year earlier, according to a Thursday report from global outplacement and executive coaching firm Challenger, Gray & Christmas. October’s total marked the highest for the month since 2003, driven largely by cost-cutting, though artificial intelligence ranked as the second-most cited factor. Year-to-date layoffs were already at their highest level since 2020 before the heavy downsizing that occurred last month.

Retail has been one of the hardest hit industries this year, behind only warehousing and non-profits. So far in 2025, the sector has announced 88,664 job cuts, a 145% increase from the 36,136 recorded through October last year.

The cuts come after a series of large-scale reductions across the retail industry. Amazon announced plans last week to eliminate 14,000 corporate roles as part of CEO Andy Jassy’s effort to streamline operations and reduce bureaucracy. Target, meanwhile, shed 1,800 white-collar positions amid slowing sales. Other consumer-facing companies such as Starbucks and UPS have pared back staff in recent months.

“There was an enormous amount of hiring that happened in that post-Covid period in retail, and retail is facing some other specific issues,” Andrew Challenger, workplace and labor expert for Challenger, Gray & Christmas, told Modern Retail in an interview. “Tariffs, immigration and persistent inflation — all of that can be affecting retail in ways that are causing [retailers] to have to make strategic changes.”

All told, the wave of layoffs has cast a pall heading into the peak holiday shopping season, retail’s busiest time of year. It’s been a tough year for the industry thanks to stubborn inflation, bleak consumer sentiment and President Donald Trump’s trade war — the U.S. average tariff rate is at its highest level since 1934, according to The Budget Lab at Yale University. Retail’s corporate belt-tightening ahead of the holidays underscores the pressure consumer companies are under to drive sales and maintain profitability in a tough economic climate. 

“Retailers are simply trying to do more with less,” said Sky Canaves, a retail analyst at eMarketer. 

Seasonal hiring squeeze

The timing of October’s layoffs is particularly striking given how close they are to the holiday shopping season.

“Over the last decade, companies have shied away from announcing layoffs in the fourth quarter, so it’s surprising to see so many in October,” Challenger said in the report. “With the onset of social media, and the ability for workers to share their negative experiences with their employers, the trend of announcing layoffs before the holidays — a practice that seemed particularly cruel — fell away.”

Retailers are also pulling back on holiday hiring. Companies are expected to add fewer than 500,000 seasonal positions this year — the lowest since 2009, according to Challenger, Gray & Christmas. Several retailers, including Kohl’s and Target, have declined to disclose their 2025 seasonal hiring plans, a departure from previous years.

Some companies plan to keep the seasonal hiring levels unchanged from 2024. Amazon said it plans to hire 250,000 workers for the peak holiday season, while Bath & Body Works announced plans to hire 32,000 workers, the same as last year for both companies. 

“While we could see a late hiring push if holiday sales surprise to the upside, the cautious pace of announcements so far suggests that companies are not betting on a big seasonal surge,” Challenger said. He added that seasonal employers are contending with a mix of challenges this year, including lingering inflation and tariffs. As such, companies are increasingly relying on automation and permanent staff over large waves of seasonal hires. 

“It’s not that people aren’t going to stores — foot traffic isn’t expected to fall much — but with fewer staff, the quality of the consumer experience could suffer.”

EMarketer’s Canaves warned that leaner staffing could become a self-fulfilling cycle. “When shoppers have bad experiences in stores because they can’t get sales help or the lines are too long, they’re less likely to return,” she said

Still, expectations for consumer spending power during the holidays offer a glimmer of hope. The National Retail Federation projects U.S. holiday sales will surpass $1 trillion for the first time in 2025, rising 3.7-4.2% over last year. EMarketer’s own forecast is slightly more conservative at $1.369 trillion, up 3.6% year-over-year.

Canaves said the outlook remains solid because “people keep spending even if they have to borrow or use payment plans like buy-now, pay-later to do so.” But that spending strength is increasingly uneven. “We’re kind of seeing a K-shaped consumer economy, where upper-income consumers are spending more and lower-income consumers are spending less,” she said. 

Inside Amazon’s and Target’s cuts

Amazon’s latest layoffs mark the company’s most sweeping since 2022. The tech and retail giant more than doubled its workforce during the pandemic, expanding from roughly 800,000 employees in 2019 to more than 1.6 million by 2021 to meet surging e-commerce demand. 

Challenger, Gray & Christmas’s recent report flagged cost-cutting and artificial intelligence as the primary drivers behind the October layoffs. However, Amazon CEO Andy Jasy told analysts on a quarterly earnings call last week that the e-commerce giant’s latest layoffs were about “culture,” not finance or AI. 

“If you grow as fast as we did for several years, … you end up with a lot more layers,” Jassy said. Reducing those layers is all part of Amazon’s mission to operate “like the world’s largest startup,” he added. 

While the cuts affect everything from software engineering to video games to advertising, retail management roles were hit hardest, according to internal data cited by Business Insider. That may reflect a broader sea change within Amazon, as its retail business now accounts for just 40.5% of total revenue, down from 60% in 2018, per e-commerce intelligence firm Marketplace Pulse.

Target’s restructuring followed a similar rationale. The company previously told Modern Retail its decision to cut roughly 1,000 team members and leave another 800 roles unfilled was meant to speed up decision-making rather than save money.“ The complexity we’ve created over time has been holding us back,” Michael Fiddelke, Target’s chief operating officer and incoming CEO, told employees in an email the company provided to Modern Retail. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”