Economic uncertainty has tilted the job market in employers’ favor, evidenced by reports of elevated layoffs throughout 2025. Like Careerminds, fellow outplacement firm Challenger, Gray & Christmas last month reported a sharp increase in job cuts, finding that July’s layoff numbers increased 140% from a year prior.
Employers have attributed layoffs to a multitude of factors, but economic uncertainty is a running theme. Challenger, for example, said that the combination of tariffs, inflation and economic uncertainty contributed to layoffs especially in the retail, automotive and nonprofit sectors. And a recent Express Employment Professionals-Harris Poll survey similarly found that 83% of hiring managers took preemptive measures in anticipation of a recession, including layoffs.
Artificial intelligence is a growing concern, too. An earlier Challenger analysis determined that some employers had begun attributing their 2025 layoffs to AI, and an executive for the firm said companies may have couched AI-caused cuts under the more general term of “technological update” so as not to draw attention to the actual cause.
But employers that point to AI as a reason for layoffs may have regrets. In April, software platform Orgvue found that, among leaders who said they laid off workers after deploying AI, more than half said their decisions were a mistake. Orgvue’s survey noted that many respondents’ self-reported lack of AI expertise inhibited successful deployment of the tech.
Generally, layoffs present a number of potential ill effects despite the potential for cost savings. Careerminds, for example, said 47% of its respondents reported productivity declines following job cuts, while 41% reported that even more talent left their organizations in the form of resignations.
Those risks were echoed in a recent Kahoot! report, which found that 65% of employees who survived layoffs said they felt unprepared or had made mistakes due to a lack of training. Nearly half reported a drop-off in both morale and engagement following a layoff.
Source – https://www.hrdive.com/news/most-hr-leaders-conducted-serial-layoffs-2025/757773/