Signs of Weakness in the U.S. Job Market: Insights from Goldman Sachs

Goldman Sachs researchers have reported a notable increase in layoffs across various sectors, suggesting a potential softening of the U.S. labor market. According to their analysis, state filings related to planned mass layoffs have surged to their highest levels since 2016, excluding the spike during the pandemic. The report highlights that layoff announcements compiled by Challenger, Gray & Christmas reached unprecedented levels for a non-recession period by October 2025, with significant cuts occurring in the tech, industrial goods, and food and beverage sectors.

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Economists Manuel Abecasis and Pierfrancesco Mei expressed concern over the rising layoff signals, indicating that workers are increasingly finding it difficult to secure new employment. They noted, "A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs." This trend is exemplified by Amazon's announcement to eliminate approximately 14,000 corporate jobs as part of its restructuring efforts.

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While discussions around artificial intelligence (AI) have become more prevalent in workforce considerations, Goldman Sachs researchers found limited evidence that AI is directly driving the recent layoffs. They stated, "While AI may be increasingly considered in workforce decisions, clear evidence of layoffs directly motivated by AI remains limited." The researchers noted that although AI has been a central topic in tech sector discussions since late 2022, its influence on layoff decisions in other industries is just beginning to emerge.

Business InsiderThere are Growing Signs of Weakness in the US Job Market

The integration of AI into workforce discussions has accelerated notably in 2025, particularly in finance and real estate sectors, which have reported high levels of AI adoption. However, the researchers emphasized that the connection between AI discussions and actual layoffs typically exhibits a lag, with layoff-focused conversations becoming more likely after multiple references to AI during earnings calls.

There are Growing Signs of Weakness in the US Job Market

The combination of rising layoff signals and the challenges faced by workers in finding new employment raises concerns about the overall health of the labor market. Goldman Sachs noted that while weekly jobless claims remain low, this may not fully reflect the deteriorating conditions, as claims tend to lag behind private layoff trackers by about two months. The researchers warned that the current situation could lead to an uptick in federal data regarding job losses as the winter progresses.

Business InsiderThere are Growing Signs of Weakness in the US Job Market

Goldman Sachs has clarified that the information presented in their report is for educational purposes only and does not constitute financial or investment advice. They have disclaimed any liability regarding the accuracy or completeness of the statements made in the report.

There are Growing Signs of Weakness in the US Job Market

• “A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs,” — Manuel Abecasis, Economist, Goldman Sachs

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• “While AI may be increasingly considered in workforce decisions, clear evidence of layoffs directly motivated by AI remains limited,” — Pierfrancesco Mei, Economist, Goldman Sachs

There are Growing Signs of Weakness in the US Job Market

The findings from Goldman Sachs underscore a critical moment for the U.S. labor market, as rising layoffs and the evolving role of AI in workforce management present significant challenges for both employers and employees.

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