Job Market News: October Layoffs Hit 20-Year High

Layoffs across the U.S. hit their highest October level since 2003, with technology and warehousing companies leading the charge as they pivot aggressively toward AI and automation.

Shay Boloor recently flagged a striking shift in how American businesses operate: job cuts last month reached levels we haven’t seen in over 20 years. Companies are reorganizing fast, leaning heavily on automation and AI to boost productivity without expanding headcount. Businesses are now scaling output through computing power, software, and data systems rather than traditional payroll—a fundamental change in how the economy runs. The data shows October’s job-cut announcements spiking dramatically, surpassing every year since the early 2000s.

This rapid transformation is pushing lawmakers to rethink tax and regulatory frameworks. Without updates, current tax structures could create serious problems—potentially driving labor-intensive companies toward bankruptcy while talent flocks to high-margin AI businesses. The economy is shifting toward systems that need fewer human workers, and the old rules just don’t fit anymore.

Governments could lose billions in budget revenue as payroll taxes shrink along with traditional workforces. Industry groups are floating alternatives, like increasing profit taxes on heavily automated sectors instead of piling more costs onto employers who still maintain human teams. The goal is to keep revenue stable while protecting existing jobs.

Policymakers are now considering broader changes, including revised corporate tax brackets and adjustments to personal income tax structures that reflect declining workforce participation relative to economic output. As AI systems generate more value than employees do, governments risk losing both payroll and profit-based revenue unless regulations catch up. The chart showing October cuts approaching 20-year highs makes the scale of this shift impossible to ignore.