- WARN-related layoff filings have risen totheir highest levels in nearly a decade, Goldman found.
- Outplacement firm data showed corporatelayoff announcements peaking outside a recession.
- Goldman said it has not concluded that AIis driving a significant share of recent job cuts.
Goldman Sachs researchers are warning thatthe US labor market may be starting to soften as private-sector data show a
growing wave of layoffs across several industries, the Wall Street bank said in
a new report.
The firm said state filings related toplanned mass layoffs have surged to their highest level since 2016, excluding
the pandemic spike — the sharpest increase Goldman hastracked in nearly a decade.
Layoff announcements compiled byChallenger, Gray & Christmas, a firm that tracks corporate job cuts, had by
October climbed to a level previously unseen outside of a recession, the report
noted, citing cuts in sectors like tech, industrial goods, and food and
beverage as factors that drove the increase.
Goldman's economists said the combinationof rising layoff signals is concerning — representing"growing signs of weakness" — because workersare increasingly struggling to secure new employment, making rebounding after
losing a paycheck especially difficult.
Even some of corporate America's biggestnames haven't evaded the job market's cooling. Amazon, for example, announced
plans this fall to eliminate about 14,000 corporate jobs as it seeks to
streamline and embrace AI.
"A sustained increase in layoffs wouldbe particularly concerning because the hiring rate for workers is low and it is
harder than usual for the unemployed to find jobs," economists Manuel
Abecasis and Pierfrancesco Mei wrote.
Decade-high layoff signals
The state filings Goldman cited — known as Worker Adjustment and Retraining Notification, or WARN,notices — are required by companies with more than 100employees in advance of instituting layoffs. They're a helpful indicator of
employer behavior, signaling when cuts may be around the corner.
On top of the rise in WARN notices, thebank found that the leadership of more publicly traded companies had begun
openly discussing potential layoffs on recent earnings calls with shareholders.
Taken together with the Challenger outplacement data, the picture strongly
suggests more companies are considering trims and efficiencies in the coming
months.
Still, the bank said weekly jobless claimsremain low, which means government reports might not yet reflect the full
extent of deterioration in the labor market. A recent Bureau of Labor
Statistics jobs report for September surpassed economists' expectations.
But Goldman noted that claims tend to lagprivate layoff trackers by about two months, which could hint at a potential
uptick in federal data about job losses as winter continues.
And although concerns have grown aboutwhether artificial intelligence is pushing companies to reduce headcount,
Goldman said current evidence does not show that AI is meaningfully driving the
latest layoffs.
"While AI may be increasinglyconsidered in workforce decisions," the Goldman researchers wrote,
"clear evidence of layoffs directly motivated by AI remains limited."