The holidays are typically a time of relief for workers, with many enjoying a break from stress, even amid the usual end-of-year pressure. However, as we approach the close of 2025, more and more employees are finding pink slips tucked into their stockings instead of year-end bonuses. Employers, once hesitant to announce layoffs during the holiday season, have started to break that unwritten rule, and the job market is showing signs of strain.
A Bleak Outlook for the Holidays
While the full employment picture for the final quarter of 2025 is still in flux due to the ongoing government shutdown and delays in Labor Department reports, recent data paints a concerning picture. A report from Challenger, Gray & Christmas found that a significant 71,321 jobs were cut in November alone. Verizon led the way with plans to slash 13,000 jobs, marking the largest number of layoffs in three years. This spike is especially worrying, as it represents only the third time in history that job cuts in November have surpassed 70,000.
Meanwhile, hiring has slowed to a crawl, with the latest hiring figures showing the weakest pace in 15 years. The labor market is cooling off—and fast.
The Changing Timing of Layoffs
In years past, layoffs were commonly announced toward the end of the year, coinciding with many companies’ fiscal year-ends. However, after the Great Recession, it became widely viewed as bad practice to make such announcements during the holiday season, when employees are least expecting job cuts.
But this year, that trend is starting to reverse. Companies are once again making tough decisions at the end of the year, much to the dismay of workers hoping to ring in the New Year without added financial anxiety. Andy Challenger, workplace expert and Chief Revenue Officer at Challenger, Gray & Christmas, noted, “It was the trend to announce layoff plans toward the end of the year, but it became unpopular after the Great Recession. Best practice now dictates that companies avoid this timing—yet we're seeing a return to that behavior.”
The AI Factor
One of the driving forces behind this surge in layoffs is AI. As companies increasingly invest in artificial intelligence to streamline operations and increase efficiency, many are reducing their workforce in the process. The move is both a response to cost pressures and a way for businesses to meet investor demands for better returns. AI’s impact is expected to grow in the coming years, with many industries looking to automate more tasks that were once handled by human workers.
In the case of Amazon, which cut 14,000 jobs in October, the company has signaled that more job reductions could be on the horizon. As Amazon’s leadership explained, the company is focusing on improving operational efficiency in 2026 by removing additional layers of management and investing in AI to further streamline operations.
Wells Fargo has similarly warned of more cuts ahead, with CEO Charlie Scharf indicating that job reductions are part of the bank’s budgeting strategy for next year. Scharf admitted that AI would play a role in reducing headcount, stating that the company expects “to have fewer people going into next year” due to efficiency gains powered by technology.
What’s Next for Workers?
The current job market is a stark reminder that economic uncertainty can strike at any time—even during the most festive season. Workers hoping to coast into the New Year may need to start preparing for potential layoffs and the possibility of more cuts in 2026. The economic landscape suggests that the pace of job reductions could increase as companies continue to focus on AI-driven efficiency.
While the end-of-year holiday season has traditionally been a time of relative peace for workers, the looming threat of layoffs is casting a shadow over this year’s festivities. For those affected, the new year may bring more challenges, but it’s also an opportunity to embrace change and prepare for a rapidly evolving workforce. The key takeaway: don't wait until after the holidays to start thinking about your next career move.
Famed consulting firm McKinsey has discussed a 10% workforce reduction in non-client-facing departments, Bloomberg reports, citing anonymous sources. The move could lead to several thousand cuts in support functions over the next 18 to 24 months as it seeks to reverse five years of flat earnings. It's the kind of advice the firm might offer one of its clients, and comes after headcount exploded between 2012 (17,000) and today (40,000). A spokesman noted that artificial intelligence is transforming its business.