Recruiting firm Challenger, Gray & Christmas has reported March U.S. job data, and layoffs saw a massive jump thanks to the work of Elon Musk and the Department of Government Efficiency (DOGE). Planned job cuts increased to 275,240 in March, a 60% increase from the 172,017 in February and a 205% increase year-over-year from 90,309.
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The March 2025 job cuts are the third-highest monthly total reported since Challenger, Gray & Christmas started tracking layoffs in 1989. The two highest job reductions happened during 2020 alongside the COVID-19 pandemic. That saw job cuts of 671,129 in April and 397,016 in May.
How DOGE Job Cuts Played Into March Data
Musk’s DOGE is the largest contributor to the March Challenger, Gray & Christmas job data. It was behind 216,215 of the 275,240 job cuts reported, representing 78.55% of total layoffs during the month. The next highest sector affected by job cuts in the report was financial, at 15,982.
It’s worth noting that the March 2025 data doesn’t include additional job cuts that have been announced by the government. The ongoing layoffs have marked an important period of transition for federal agencies as the Trump administration makes major changes to reduce government spending. That’s resulted in 279,445 job cits in 2025, up 672% from the 36,195 reported in Q1 2024.
What Does This Mean for the Economy?
Increased job cuts are one of the main signals of an incoming recession. Based on the Sahm rule, the U.S. would need roughly 650,000 layoffs compared to January data to trigger a recession warning. For comparison, year-to-date layoffs have reached 497,052.
It’s unlikely that DOGE cuts will trigger a recession marker as the Federal government isn’t a large part of the economy. It only employs about 2% of U.S. workers, meaning an even larger number of job cuts would be needed for it to affect the economy.
However, the federal government is already affecting the economy in other ways. President Donald Trump’s trade war includes tariffs on all imports, which is set to increase prices for consumers. This could push the U.S. closer to recession when combined with other ongoing economic concerns. To keep up with that data, investors will want to watch the economic calendar and the TipRanks economic dashboard.
