Layoffs Surge 205% to Third-Highest on Record as Federal Cuts Dominate

In March 2025, the U.S. job market experienced a dramatic increase in layoffs, with 275,240 job cuts announced—a 205% surge compared to the same month last year. This marks the third-highest monthly total on record, surpassed only by the layoffs in April and May 2020 during the initial economic shutdowns of the COVID-19 pandemic.

Federal Layoffs Drive the Surge

The Department of Government Efficiency (DOGE), led by Elon Musk, played a pivotal role in this increase. In March alone, DOGE’s initiatives resulted in over 216,000 federal employees losing their jobs. Since February, the department has been responsible for more than 280,000 layoffs across 27 federal agencies.

Andrew Challenger, senior vice president at Challenger, Gray & Christmas, noted, “Job cut announcements were dominated last month by Department of Government Efficiency [DOGE] plans to eliminate positions in the federal government. It would have otherwise been a fairly quiet month for layoffs.” CBS News

Impact on Government Agencies

Several key federal agencies faced significant workforce reductions:

Veterans Affairs Department: Approximately 80,000 positions eliminated.
Internal Revenue Service (IRS): Around 18,000 job cuts.
Treasury Department: Undergoing substantial workforce reductions.

Additionally, the U.S. Agency for International Development (USAID) is undergoing a major reorganization, with plans to terminate nearly all remaining staff and integrate its functions into the State Department. This move has raised concerns about the U.S.’s ability to respond to global crises. Reuters

Economic and Regional Implications

Despite the surge in layoffs, the broader labor market has shown resilience. Weekly jobless claims fell to 219,000 in the week ending March 29, indicating continued stability. However, the full impact of the federal layoffs may not yet be reflected in these figures. Reuters

Economists are closely monitoring the situation, especially in light of new trade policies, including a 10% baseline tariff on all imports, which could further influence employment trends. Reuters

Long-Term Outlook

Elon Musk’s mandate with DOGE aims to achieve $1 trillion in federal cost cuts within a 130-day tenure ending in May. While DOGE claims to have already saved $140 billion through various measures, these figures are contested due to calculation errors. Reuters+2Reuters+2Reuters+2 Reuters+2Reuters+2Reuters+2

As DOGE’s initiatives continue, the long-term effects on public services and the overall economy remain uncertain. Policymakers and economists will need to assess whether the private sector can absorb the influx of displaced federal workers or if further economic repercussions are imminent.