December hiring surged to a three-year high as layoffs fell, consultancy finds

A consulting firm estimates that U.S. companies hired the most workers in December since 2022, offering the sluggish job market a ray of hope as layoffs fell to their lowest level in 17 months.

Challenger, Gray & Christmas reported Thursday that employers cut 35,553 jobs nationwide last month, down about 50% from 71,321 in November and about 8% from 38,792 in December 2024.

The firm noted that the monthly total was the lowest since companies announced 25,885 layoffs in July 2024. It was also the lowest for December since 2023, when employers shed 34,817 jobs.

“The year closed with the fewest announced layoff plans all year,” said Andy Challenger, the company’s workplace expert and chief revenue officer. “While December is typically slow, this, coupled with higher hiring plans, is a positive sign after a year of high job-cutting plans.”

The report found employers announced 10,496 hiring plans in December, the highest total for the month since 51,693 in 2022. Last month’s tally rose 16% from 9,074 hiring plans in November and 31% from 7,999 in December 2024.

The numbers offer a rare sign that the “low-hire, low-fire” labor market that dogged President Trump’s first year back in office could loosen in the new year, despite layoffs continuing to outpace new hires.

The Labor Department reported Wednesday that businesses posted 7.1 million open jobs at the end of November, down from 7.4 million in October, despite solid economic growth and fewer layoffs.

Analysts interviewed by The Washington Times said many employers remain hesitant to make staffing changes due to uncertainty about White House tariffs and advances in artificial intelligence.

“We aren’t out of the woods yet,” said Patrick Murphy, executive director of geopolitical advisers at Hilco Global, a financial services company.

Mr. Murphy, a former Democratic congressman from Pennsylvania, said many companies are waiting to see whether the Supreme Court strikes down the high import duties Mr. Trump has imposed on goods from dozens of countries.

Christopher Hodge, former principal economist at the Federal Reserve Bank of New York, said the job market outlook remains mostly cloudy.

“The policy outlook is still far from certain, and the possibility of a seismic shock still looms,” said Mr. Hodge, now chief U.S. economist at Natixis CIB Americas. “Businesses aren’t sure about the potential benefits of AI and would prefer to make do with current staff rather than expand.”

The Challenger report found that U.S. employers announced 507,647 planned hires last year, down 34% from 769,953 in 2024 and the lowest total since 402,608 in 2010.

Last year’s hiring plans included 372,520 seasonal jobs added between October and December, the lowest since Challenger began tracking them in 2012.

By comparison, companies cut 1.2 million jobs last year, a 58% increase from 761,358 in 2024 and the most since 2.3 million jobs disappeared during the pandemic in 2020.

The greatest losses occurred in government, technology and warehouse jobs.

Companies cited “DOGE impacts” in the largest numbers of layoffs last year, referring to Mr. Trump’s Department of Government Efficiency. Challenger found that DOGE efforts to shrink the government drove 26% of all layoffs last year — including 293,753 federal worker and contractor layoffs and 20,976 cuts to private and nonprofit sector jobs that lost federal funding.

The report cited restructuring, artificial intelligence and economic factors such as tariffs as additional factors.

Restructuring, a common factor cited in store closings, spurred 5,356 layoffs in December. That brought the 2025 total to 133,611 restructuring cuts.

Companies cited AI for 142 layoffs in December, or 54,694 for the year, as they continued to automate some programming and other roles previously filled by recent college graduates.

Employers flagged tariffs in 7,908 job cuts in 2025, but announced no tariff-related layoffs in December. There were 2,061 such layoffs in November.

Mr. Trump fully implemented his tariffs, or duties on foreign goods brought to the U.S., in late summer. He has insisted that the levies will spur investment in domestic jobs, as they exempt made-in-America products and pressure foreign nations to build factories in the U.S. in exchange for lower tariff rates.

Several companies have sued the president in the case pending before the Supreme Court. They argue that the tariffs force them to eat the cost increases or hike consumer prices.

Reached Thursday for comment, the White House pointed to new data from the Bureau of Economic Analysis showing that the U.S. trade deficit in October dropped to its lowest level since 2009.

“Economic growth is accelerating, trillions in investments to make and hire in America are pouring in, and American exports are surging, thanks to the President’s trade deals and pro-growth policies,” Kush Desai, a White House spokesman, said in a statement.