Layoffs, health scares and family needs are forcing some into retirement before they're ready.
Washington D.C. – In a stark shift for the U.S. labor market, more than 275,000 layoffs were announced last month, reaching levels not seen since the pandemic, according to a report released Thursday.
The primary driver of these cuts was the federal government, which accounted for nearly 80% of the layoffs. The Department of Government Efficiency (DOGE) spearheaded sweeping cost-cutting measures, leading to 216,215 job eliminations. This marks the third-highest monthly layoff total in recorded history, trailing only the devastating numbers seen during the height of the COVID-19 crisis in April and May 2020.
“Job cut announcements were dominated last month by [DOGE] plans to eliminate positions in the federal government,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, the global outplacement firm that conducted the report. “It would have otherwise been a fairly quiet month for layoffs.”
Beyond the federal cuts, 59,025 additional job losses were announced, with the technology and retail sectors hit hardest. The March figures represent a 60% increase from February’s layoff numbers and a staggering 205% jump from March 2024, underscoring the rapid economic shifts taking place.
While some federal employees have been let go immediately, others remain on paid notice periods, meaning that the full impact of these job losses on the economy may take weeks or months to materialize. The report also notes that these numbers reflect layoff intentions rather than immediate terminations, leaving room for potential delays or reversals.
The economic ripple effects of these mass layoffs are already being felt, particularly in local communities reliant on federal employment. Since February, a total of 280,253 job cuts have been recorded among federal workers and contractors across 27 agencies. Additionally, 4,429 layoffs in the healthcare and nonprofit sectors have been linked to reductions in federal aid and contract terminations.
“Cutting government spending indiscriminately has no positive effect on any economy,” said Gregory Daco, chief economist at EY-Parthenon. “Doing so indiscriminately and rapidly risks having more significant spillovers to the private sector.”
The broader job market has remained relatively stable, but there are signs of strain. Continuing claims for unemployment insurance rose by 56,000 to 1.9 million as of March 22, marking the highest level since November 2021. However, first-time unemployment claims actually declined to 219,000 last week, countering concerns of a sharp uptick in joblessness.
The full impact of these federal job cuts may become clearer with the March jobs report, set to be released by the Bureau of Labor Statistics on Friday. This data could provide crucial insights into how the Trump administration’s aggressive policy shifts—including its restructuring of the federal government—are influencing employment trends across the nation.
