US Job Cuts Hit Two-Year Low of 33,429 in July
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
job-cutslayoffslabor-market
Fazen Markets Editorial Desk
Collective editorial team · methodology
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US-based employers announced 33,429 job cuts in July, marking the lowest monthly total in two years. This represents a 27% decline from the 45,849 layoffs announced in May and a 46% drop from the 62,075 cuts recorded in July 2025. The data, reported by Challenger, Gray & Christmas, indicates a significant deceleration in corporate downsizing plans during the summer months.
The US labor market has been a focal point for the Federal Reserve in its battle against inflation. A tight labor market with low layoff rates can contribute to wage growth, which the Fed monitors closely when considering interest rate policy. The current federal funds rate target range sits at 5.25%-5.50%, a level maintained to cool economic activity and price pressures.
This July's figure represents the fifth month in 2026 where job cuts were lower than in the corresponding month of the previous year. This sustained trend suggests a underlying stability in employment demand outside of specific, high-profile sectors. The last time monthly announced job cuts were this low was in July 2024, when employers announced 31,245 layoffs.
The dramatic summer slowdown in layoff announcements coincides with a period of steady, albeit moderating, economic growth. Second-quarter GDP growth figures and consistent consumer spending data have provided companies with more confidence to maintain current staffing levels, reducing the impetus for broad-based workforce reductions.
The July total of 33,429 job cuts is a multi-month low. The year-to-date total through July stands at 477,033 announced layoffs. This represents a substantial 41% decrease from the 806,383 cuts announced in the first seven months of 2025.
| Metric | July 2026 | July 2025 | Change |
|---|---|---|---|
| Monthly Job Cuts | 33,429 | 62,075 | -46% |
| YTD Job Cuts | 477,033 | 806,383 | -41% |
Despite the overall improvement, the technology sector continues to dominate layoff announcements. Tech companies announced 9,867 cuts in July, bringing its sector-specific year-to-date total to 149,023. This figure is 67% higher than the tech sector's total through July 2025.
Artificial intelligence was cited as the leading reason for job cuts for the fifth consecutive month, accounting for 10,970 layoffs in July alone. Year-to-date, AI has been cited in 112,713 job cut announcements, representing approximately 24% of all cuts announced in 2026.
The bifurcated nature of the labor data creates distinct winners and losers. Broad market indices like the SPX and ETFs tracking the Russell 2000 small-cap index could benefit from the perception of overall labor market resilience. This supports the narrative of a soft economic landing, which is generally positive for risk assets.
Conversely, the technology sector's continued high level of cuts presents a headwind for certain tech stocks and related ETFs like the XLK. Companies citing AI as the reason for restructuring may face investor scrutiny over the short-term costs of technological transition, even if the long-term efficiency gains are promising.
A key limitation of this data is that it tracks announced intentions, not necessarily completed layoffs. Companies may announce cuts that are implemented over many months or are offset by hiring in other divisions, a nuance not captured in the headline figures. The data also does not include hiring plans, providing only one side of the employment equation.
Market positioning likely reflects this complexity. Investors may be long broad market indices while maintaining short positions or underweight exposures in specific tech sub-sectors most aggressively pursuing AI-driven automation, such as certain software and services companies.
The next major data point for the labor market will be the August Job Cuts report, scheduled for release in early September. This will indicate if the July slowdown was a seasonal anomaly or the start of a new trend.
Investors should monitor the upcoming July JOLTS report on August 6th and the Bureau of Labor Statistics Employment Situation report on August 8th for data on job openings and the unemployment rate. These figures will provide a more complete picture of labor supply and demand.
Key levels to watch include the 10-year Treasury yield, which will react to any signs of labor market overheating that could influence Fed policy. A sustained break below 40,000 monthly announced job cuts would further support the thesis of labor market normalization.
A low number of announced job cuts generally indicates employer confidence in economic conditions and sustained demand for their goods or services. It suggests businesses see no immediate need to reduce costs through significant headcount reductions, which is a positive sign for overall economic health and consumer spending stability.
The technology sector is undergoing a significant transformation driven by artificial intelligence adoption. Companies are restructuring to invest heavily in AI capabilities, which often involves cutting roles in legacy business units while simultaneously hiring for AI-focused positions. This sector-specific trend contrasts with the broader market improvement.
Announced job cuts are a leading indicator of corporate intent but have limitations. They represent planned actions, not necessarily completed layoffs, and they don't capture hiring that may offset these reductions. For a complete view, they must be analyzed alongside actual unemployment claims data, hiring reports, and job opening statistics from government sources.
US labor market resilience is broadening despite continued tech sector restructuring driven by AI adoption.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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