U.S. employers announced fewer layoffs in September, offering another indication that job-cutting activity has moderated even as companies remain cautious about expanding their workforces. According to Challenger, Gray & Christmas, employers announced 43,281 job cuts during the month, 20% fewer than in September 2025 and the lowest September total since 2022.

The improvement extends beyond the monthly comparison. Through the first nine months of the year, announced layoffs were down 39% from the same period last year. Excluding government workers, the decline stood at 15%, suggesting that private-sector employers have also reduced the pace of workforce reductions.

Why Is Technology Still Leading Layoffs?

Technology companies remained the largest source of announced job cuts in September. The sector reported 10,799 planned reductions, representing nearly one-third of all layoffs announced during the month.

The concentration of cuts in technology contrasts with the broader decline in overall layoffs. It suggests that while companies are not broadly pursuing aggressive workforce reductions, some industries continue to restructure their staffing levels as they adjust to changing costs, technology investments and business conditions.

Why Aren’t Companies Hiring More for the Holidays?

The more cautious signal comes from seasonal hiring. Employers announced plans to add nearly 91,000 workers as holiday hiring began, but that figure was 23% below last year’s level and represented the smallest September total for seasonal hiring since 2011.

Retailers accounted for more than 70% of September’s hiring plans, making the sector the primary driver of seasonal employment. However, even early holiday hiring leaders announced substantially fewer positions than last year.

Craft retailer Michaels and temporary Halloween retailer Spirit Halloween together announced 62,000 seasonal hires this year, compared with nearly 101,000 in 2025. The decline illustrates how retailers are approaching the holiday season with greater restraint.

What Is Making Employers More Cautious?

Challenger, Gray & Christmas described companies as being in a “wait-and-see” period. Employers are confronting higher energy costs, uncertainty surrounding the Iran war, the possibility of another interest-rate increase and potentially higher healthcare expenses.

Those factors can make workforce expansion more difficult to justify even when layoffs are declining. Companies may therefore be attempting to preserve existing staffing levels while limiting commitments to additional workers until the economic outlook becomes clearer.

Could Holiday Hiring Reveal the Next Labor-Market Trend?

The combination of fewer layoffs and weaker hiring plans presents a more nuanced picture of the U.S. labor market. Companies are not announcing workforce reductions at the pace seen previously, but they are also showing limited urgency to expand employment.

That cautious balance could become particularly important during the holiday season, when retailers traditionally increase staffing significantly. A weaker seasonal hiring cycle could provide another indication that businesses are prioritizing cost control and flexibility rather than aggressively expanding payrolls.

What Comes Next for Employment?

The September data suggests that the labor market is neither experiencing a broad acceleration in layoffs nor a strong hiring expansion. Instead, employers appear to be maintaining a more defensive approach as they assess energy costs, interest rates, geopolitical uncertainty and operating expenses.

For investors and policymakers, the key question will be whether this caution remains temporary or develops into a broader slowdown in labor demand. Future hiring plans, layoffs and consumer spending during the holiday period could provide important signals about the resilience of the U.S. economy.