Layoffs across the U.S. spiked in February, reaching their highest levels since July 2020, led by widespread firings of government workers ordered by Elon Musk's Department of Government Efficiency, or DOGE, according to outplacement firm Challenger, Gray & Christmas.
Employers cut 172,017 jobs last month, a 245% increase from January and double the number that was announced during the same month a year ago, the company said. That marks the highest monthly number of layoffs since July 2020, when 262,649 cuts were announced, the firm added.
The job cuts were led by losses in federal jobs, largely directed by DOGE, which says it is dedicated to rooting out government waste and fraud. DOGE-related job losses have cut a wide swath across federal government agencies by targeting newly hired workers, regardless of their job performance or whether their jobs are essential.
In a few cases, some agencies have scrambled to rehire workers who were fired under DOGE's policies, such as the U.S. Agriculture Department bringing back bird flu experts who were mistakenly cut.
Federal agencies announced 62,242 job cuts last month, an increase of 41,311% from a year earlier, Challenger, Gray said. More federal cuts are on the way, with the Veterans Affairs Department planning to cut thousands of jobs in the coming months, while some government workers may opt to leave because of the uncertainty caused by the layoffs, the group said.
"When mass layoffs occur, it often leaves remaining staff feeling uneasy and uncertain. The likelihood that many more workers leave voluntarily is high," Andrew Challenger, workplace expert for Challenger, Gray & Christmas, said in a statement.
The impact of the DOGE cuts haven't yet shown up in official government data, with the Labor Department saying Thursday that the number of Americans filing for jobless benefits fell by 21,000 to 221,000 for the week ending March 1.
On Friday, the monthly jobs report is expected to show that employers hired 159,000 workers in February, an increase from January's 143,000, according to financial data firm FactSet. The jobless rate is forecast to remain steady at 4%. Some analysts expect layoffs ordered by DOGE to show up in the report in the coming weeks or months.
Other sectors besides the federal government also laid off workers last month, Challenger, Gray found. Retailers cut almost 39,000 jobs, while technology companies cut 14,554 jobs in February, its data shows.
The DOGE cuts are already having "downstream" effects, Challenger, Gray said. For instance, private non-profits cut about 900 jobs due to the impact of loss of federal funding, it noted.
