A recent report from Goldman Sachs' research team issued a strong warning about the US labor market. Researchers used alternative data indicators such as private sector layoff announcements and warning notices to find that although official US employment reports were suspended due to the federal government shutdown, the US labor market is showing "growing signs of weakness." The report specifically names the technology, industrial goods, and food and beverage industries, emphasizing that layoffs in these sectors are accelerating, and if this trend continues, it could drag down the overall job market, causing it to weaken more rapidly.
Layoffs hit a new high outside of recession
According to data from Challenger, Gray & Christmas cited by Goldman Sachs, the number of private sector layoff announcements in October 2025 reached a record high outside of a recession. Meanwhile, the number of large-scale layoff warnings received by state governments has surged to its highest level since 2016 (excluding the peak of the 2020 pandemic), the largest increase Goldman Sachs has tracked in nearly a decade.
Meanwhile, Goldman Sachs economists Manuel Abecasis and Pierfrancesco Mei emphasized that the most worrying aspect is not just the number of layoffs, but the simultaneous occurrence of a "hiring freeze" and "rising layoffs." Currently, U.S. companies are showing weak hiring intentions, and the average job search time for the unemployed has significantly increased, meaning the impact of layoffs will be more lasting and harder to recover from than in the past.
Even tech giants are not immune to the wave of layoffs.
It's worth noting that Goldman Sachs added that even US tech giants like Amazon have joined this wave of downsizing and layoffs. Amazon announced this fall that it would cut approximately 14,000 management positions, citing "organizational flattening" and "embracing AI." Goldman Sachs observed that an increasing number of publicly traded company executives are openly discussing layoff plans during earnings calls, indicating that companies are becoming more conservative about their future workforce needs.
AI is not the main reason, but pressure is building.
While there are concerns that artificial intelligence (AI) is taking away jobs, Goldman Sachs believes that current evidence is insufficient to prove that AI is the primary cause of this wave of layoffs. The report points out that although companies frequently mention AI in their financial reports, less than 2% of layoffs are explicitly attributed to AI replacement. Instead, the real pressure comes from slowing consumer and corporate spending, rising costs, and uncertainty about the economic outlook for 2026.
Goldman Sachs cautions that while weekly initial jobless claims in the US remain low, this indicator typically lags behind private sector layoff data by about two months. With winter approaching, if the wave of layoffs doesn't subside, the official unemployment rate, to be released in early 2026, is likely to rise rapidly, at which point the market will truly feel the impact of a cooling job market.
