US employers have reduced their workforce more in the first seven months of 2025 than in all of 2024. The DOGE cuts to the public sector were the primary driver of layoffs; however, there has been a notable drop in retail and technology positions in the private sector.
July alone saw 62,000 jobs reduced from the workforce, a 30% increase from June and 140% from July 2024. Over 806,000 positions were removed from January to July, surpassing the 761,358 job cuts in all of 2024.
Public sector positions in government saw the largest reduction at 292,294 positions. The current administration implemented the largest public sector reduction in modern US history by offering over 2 million government employees a buyout. Around 65,000 people accepted the buyout offer within the first two weeks alone. Additionally, DOGE halted grant funding to various NGOs and non-profits, leading to 17,826 fires, which amounts to a 413% annual reduction. None of these positions contributed to the US GDP.
The private sector shed 33,000 positions in June 2025, marking the first contraction in the private sector in nearly two years. For 2025 overall, the sectors facing the steepest layoffs are technology (-89,251) and retail (-80,487).
A few major tech companies implemented large layoffs this year such as Intel (-21,000), Microsoft (-15,000), PayPal (-2,500), and HP (-2,000). The advancement of Artificial Intelligence has led to a drastic reduction in workers in the technology sector, with some reports believing that AI is replacing around 491 tech jobs per day. We’ve seen a 36% decline in tech jobs this year compared to last as technology advances. Another issue has been outsourcing positions to places like India. The US outsourced 300,000 tech-based jobs overall to India as offshoring trends continue. Not only is labor cheaper, but India produces over 1.5 million engineering graduates annually. Visa restrictions have less of an impact as remote work is commonplace.
Retail experienced the second-largest decline in private sector roles with a 249% annual decline. Brick and mortar stores are deteriorating as another casualty of creative destruction as consumers prefer to spend online. Various articles are blaming tariffs and price increases for the drop in retail positions, but consumers are simply spending less. Around 20,000 retail positions were lost to AI automation, especially for basic roles and inventory management. American consumers have never rebounded from the increased cost of living. Credit card delinquencies and bankruptcies continue to reach new highs, and every survey indicates that households are spending more on less and focusing their resources on the basics.
Technology and retail are sensitive to advancements in AI. Offshoring has drastically cut competitiveness for American workers in tech. There is an offshoring corporate tax penalty of 28% but it is safe to assume that this figure will rise. As for AI, the government hasn’t found a way to tax robotic systems, but rest assured they will find a way.
