Layoffs Surge to Post-Pandemic High
As tech stocks tumble, a troubling employment trend is emerging across the broader economy. U.S. employers announced 172,017 layoffs in February alone, according to outplacement firm Challenger, Gray & Christmas - a staggering 245% increase from January and the highest monthly total since July 2020 during the pandemic.
February Layoff Statistics:
• 172,017 total announced job cuts
• 245% increase from January
• Highest monthly total since July 2020
• Highest February total since 2009
Private Sector Warning Signs
The labor market weakness extends beyond government cuts. ADP's private sector report showed just 77,000 new jobs added in February, less than half of January's 186,000 figure and far below economists' expectations. "We're seeing a significant cooling in the labor market," noted Andrew Challenger, workplace expert at Challenger, Gray & Christmas. "With the impact of trade policy uncertainty, as well as canceled government contracts and bankruptcies, job cuts have soared."
Market Implications
The combination of tech sector weakness and deteriorating employment data has triggered a broader reassessment of market risk. The Bloomberg Magnificent Seven Index, which tracks the market's largest tech companies, has now fallen 16% from its December peak. Meanwhile, defensive and low-volatility stocks are outperforming for the first time in two years.
"Right now, trade policy is dominating market action," says Chris Larkin at E*Trade from Morgan Stanley. "Until the tariff smoke clears, it could continue to be a bumpy ride for traders and investors." The sentiment was echoed by Steve Chiavarone of Federated Hermes, who noted, "The market isn't really forgiving at this stage... we think we are just in a period of max uncertainty and a bit of an economic soft patch."
×
Sources:
- Bloomberg - Wall Street Goes From Hope to Panic
- Challenger, Gray & Christmas - February 2025 Job Cuts Report
- CNBC - Latest Economic Data Shows Market Strain
- Reuters - Tech Stocks Lead Market Rout
- Yahoo Finance - Market Wrap: Nasdaq Tumbles
- ADP National Employment Report - February 2025
- E*Trade Market Commentary
- Federated Hermes Market Analysis