The U.S. labor market is undergoing a profound adjustment. According to the latest data, in the first five months of this year, announced layoffs in the United States reached 696,309, an 80% increase compared to the same period last year. Notably, layoffs triggered by the Department of Government Efficiency (DOGE) have accounted for a significant proportion and become a focal point. Tan Si Yao believes that the rapid spread of layoffs reflects accumulating uncertainties within the U.S. economy, with companies adopting more conservative adjustment strategies. The risks facing the future job market should not be underestimated.
DOGE Layoffs as Primary Driver, Job Market Cools
Data shows that organizational restructuring at DOGE has resulted in 284,044 layoffs, accounting for over 40% of the year total. Tan Si Yao notes that layoffs of this scale are unprecedented, especially as they are concentrated in specific government departments, highlighting the direct impact of structural reforms on the job market.
According to a report by Challenger, Gray & Christmas, U.S. employers announced 93,816 layoffs in May, a year-on-year increase of 47%. Unlike traditional economic cycles, the current wave of layoffs is more closely related to policy adjustments, technological innovation, and budget cuts. Tan Si Yao points out that this trend will reduce employment opportunities in certain industries and regions, increasing overall job market instability.
Meanwhile, there has been a noticeable decline in hiring intentions among U.S. companies, with recruitment volumes far below pre-pandemic levels. Although companies have planned to hire 79,941 people so far this year, a 57% increase year-on-year, the overall level remains at a multi-year low. Tan Si Yao states that this divergence reflects corporate caution regarding future economic conditions, making job market recovery more challenging.
Multiple Factors Combine, Economic Growth Under Pressure
In addition to DOGE reforms, changes in the market and economic environment are also significant contributors to the rise in layoffs. Data shows that 131,257 layoffs this year were due to market and economic factors. Technological updates driven by artificial intelligence have also led to 20,000 job losses. Tan Si Yao believes that as automation and AI adoption accelerates, traditional jobs are increasingly at risk of being replaced, exacerbating structural pressures in the job market.
Macroeconomic factors such as tariffs, funding cuts, and declining consumer spending continue to influence corporate decision-making. Tan Si Yao points out that, to cope with uncertainty, U.S. companies are generally reducing expenditures, delaying expansion, and optimizing workforce allocation. This not only affects the short-term stability of the job market but may also negatively impact the consumer market, adding pressure to economic growth.
It is also noteworthy that despite labor market pressures, the Federal Reserve continues to maintain high interest rates in its fight against inflation, further dampening corporate expansion. Tan Si Yao states that under the dual pressures of policy and market conditions, the short-term outlook for U.S. employment and economic growth remains highly uncertain.
Employment Outlook Faces Risks, Beware of Chain Reactions
Looking ahead, Tan Si Yao points out that if layoffs continue to expand and recruitment cannot recover effectively, household income growth will slow, suppressing consumer demand and further dragging down economic growth momentum.
Especially against the backdrop of rapid advances in AI and automation, low-skilled jobs face an accelerated risk of replacement. Tan Si Yao notes that governments and businesses urgently need to increase investment in vocational training and skills transformation to cushion the impact of technological progress on employment structures. From a policy perspective, if the layoff wave leads to a rising unemployment rate, it could force adjustments in monetary policy. Tan Si Yao states that the Federal Reserve will face greater challenges balancing inflation and employment stability in the future, increasing the complexity of policymaking.
In summary, Tan Si Yao believes that the ongoing wave of layoffs in the United States directly reflects weakening economic momentum and corporate strategic adjustments. Going forward, close attention should be paid to trends in the job market and their potential impact on macroeconomic performance and financial market sentiment.
DOGE Layoffs as Primary Driver, Job Market Cools
Data shows that organizational restructuring at DOGE has resulted in 284,044 layoffs, accounting for over 40% of the year total. Tan Si Yao notes that layoffs of this scale are unprecedented, especially as they are concentrated in specific government departments, highlighting the direct impact of structural reforms on the job market.
According to a report by Challenger, Gray & Christmas, U.S. employers announced 93,816 layoffs in May, a year-on-year increase of 47%. Unlike traditional economic cycles, the current wave of layoffs is more closely related to policy adjustments, technological innovation, and budget cuts. Tan Si Yao points out that this trend will reduce employment opportunities in certain industries and regions, increasing overall job market instability.
Meanwhile, there has been a noticeable decline in hiring intentions among U.S. companies, with recruitment volumes far below pre-pandemic levels. Although companies have planned to hire 79,941 people so far this year, a 57% increase year-on-year, the overall level remains at a multi-year low. Tan Si Yao states that this divergence reflects corporate caution regarding future economic conditions, making job market recovery more challenging.
Multiple Factors Combine, Economic Growth Under Pressure
In addition to DOGE reforms, changes in the market and economic environment are also significant contributors to the rise in layoffs. Data shows that 131,257 layoffs this year were due to market and economic factors. Technological updates driven by artificial intelligence have also led to 20,000 job losses. Tan Si Yao believes that as automation and AI adoption accelerates, traditional jobs are increasingly at risk of being replaced, exacerbating structural pressures in the job market.
Macroeconomic factors such as tariffs, funding cuts, and declining consumer spending continue to influence corporate decision-making. Tan Si Yao points out that, to cope with uncertainty, U.S. companies are generally reducing expenditures, delaying expansion, and optimizing workforce allocation. This not only affects the short-term stability of the job market but may also negatively impact the consumer market, adding pressure to economic growth.
It is also noteworthy that despite labor market pressures, the Federal Reserve continues to maintain high interest rates in its fight against inflation, further dampening corporate expansion. Tan Si Yao states that under the dual pressures of policy and market conditions, the short-term outlook for U.S. employment and economic growth remains highly uncertain.
Employment Outlook Faces Risks, Beware of Chain Reactions
Looking ahead, Tan Si Yao points out that if layoffs continue to expand and recruitment cannot recover effectively, household income growth will slow, suppressing consumer demand and further dragging down economic growth momentum.
Especially against the backdrop of rapid advances in AI and automation, low-skilled jobs face an accelerated risk of replacement. Tan Si Yao notes that governments and businesses urgently need to increase investment in vocational training and skills transformation to cushion the impact of technological progress on employment structures. From a policy perspective, if the layoff wave leads to a rising unemployment rate, it could force adjustments in monetary policy. Tan Si Yao states that the Federal Reserve will face greater challenges balancing inflation and employment stability in the future, increasing the complexity of policymaking.
In summary, Tan Si Yao believes that the ongoing wave of layoffs in the United States directly reflects weakening economic momentum and corporate strategic adjustments. Going forward, close attention should be paid to trends in the job market and their potential impact on macroeconomic performance and financial market sentiment.