U.S. employers announced 35,553 job cuts in December, the lowest monthly total in 17 months and a 50% decline from November’s 71,321 cuts, according to outplacement advisory firm Challenger, Gray & Christmas.
The more positive December figure marks a shift after a turbulent 2025 which saw 1.2 million job cuts, with big names like Amazon, Verizon and other key employers enacting layoffs.
“The year closed with the fewest announced layoff plans all year. While December is typically slow, this, coupled with higher hiring plans, is a positive sign after a year of high job-cutting plans,” said Andy Challenger, chief revenue officer for Challenger, Gray & Christmas.
Other positive news is that December hiring announcements reached 10,496, the highest total for the month since 2022, up 31% from December 2024.
Tech sector continues AI transformation
Technology companies led private sector cuts with 154,445 in 2025, up 15% from 133,988 in 2024. “Technology has been pivoting to both developing and implementing artificial intelligence much more quickly than any other industry,” Challenger commented in the report.
Employers blamed artificial intelligence for 54,836 job cuts in 2025, or 4.5% of all layoffs. This raises the total to 71,825 since Challenger began tracking AI-related cuts in 2023.
While AI gets significant attention, traditional business factors such as market conditions, closures, restructuring and cost-cutting were far more significant drivers of job losses in 2025.
Despite layoffs, demand for specialized tech roles remains strong, according to Christine Belmonte, president of technology staffing at advisory firm The Planet Group.
“Demand remained strongest for specialized, execution-critical roles, including developers, data engineers, cloud and systems talent, business analysts, QA professionals and talent supporting ERP implementations and optimization initiatives,” according to Belmonte.
Market signals point to stability
The Planet Group’s Belmonte characterized December’s hiring activity as reflecting “a stable, disciplined market rather than a meaningful acceleration or slowdown.”
Several staffing metrics indicate employers are focused on maintaining workforce stability as they enter 2026. Belmonte said fewer contract assignments ended, more workers moved to new projects and more contractors received extensions than last year. She says this suggests companies want to keep experienced talent engaged in current and upcoming work.
Employer sentiment can be described as “cautiously optimistic,” she added, with organizations increasingly comfortable operating within the current environment and focused on efficiency and selective investment.
The Planet Group expects steady hiring through the first quarter of 2026, with potential for increased permanent hiring in the second quarter as companies invest in building stronger internal teams and transformation initiatives.
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