In March, job cuts in the U.S. surged to the highest level since the pandemic recession due to planned layoffs by employers looking to reduce spending. The global outplacement firm Challenger, Gray & Christmas reported a 60% increase in planned job cuts to 275,240, the highest since May 2020. This marked the third highest monthly total on record. The first quarter of 2021 saw the highest number of layoffs at 497,052 since the first quarter of 2009 during the Great Recession.
A significant portion of the layoffs occurred in Washington D.C., mainly due to federal government job cuts. Over the past two months, Challenger tracked 280,253 planned layoffs of federal workers and contractors impacting 27 agencies. Other job cuts resulted from cutting federal aid or contracts, affecting non-profits and health organizations.
The Department of Government Efficiency, initiated by tech billionaire Elon Musk, has been reducing the public workforce as part of President Donald Trump's administration's cost-cutting efforts. In March, most job cut announcements were related to the Department of Government Efficiency's plans to trim positions in the federal government.
Despite the mass firings, the official labor market data has not yet reflected the impact significantly as unions have contested the dismissals in court leading to the reinstatement of thousands of workers. The layoffs in the health sector continue, with 10,000 job cuts announced this week.
While there were increases in planned layoffs in the technology and retail industries, hiring plans dropped significantly in March. Companies aimed to hire 13,198 workers, down from 34,580 in February. The hiring intentions for the first quarter also decreased by 16% from the previous year to 53,867, the lowest since 2012.
Challenger noted the rehiring of 3,972 federal workers in March, which were included in the hiring plans. However, tens of thousands of probationary workers dismissed by the Department of Government Efficiency weren't counted in the planned layoffs total. Around 24,000 workers have been reinstated by courts, and they were not included in the hiring figures for March.