Layoffs Hit Highest Level Since 2020: DOGE’s Impact on Federal Employment Explained

Recently, former USAID employees left their workplace in Washington, D.C., carrying boxes and receiving applause from supporters. The scene highlighted the ongoing changes in the federal workforce.

In February, layoffs reached a nearly five-year high, according to the outplacement firm Challenger, Gray & Christmas. They reported that U.S. employers announced 172,017 layoffs, which is a shocking 245% increase from January. This is the highest monthly layoff count since July 2020, during the peak of the COVID-19 pandemic, and the highest for February since 2009, amid the global financial crisis.

Over a third of these layoffs were linked to efforts led by billionaire entrepreneur Elon Musk, aimed at reducing the federal government workforce, with approval from President Donald Trump. The total number of announced federal job cuts reached 62,242, affecting 17 different agencies.

Andrew Challenger, a workplace expert at the firm, noted that various factors contributed to this rise in layoffs. These include actions from the Department of Government Efficiency (DOGE), canceled government contracts, trade war fears, and bankruptcies.

By the end of February, total planned job cuts for the year reached 221,812, marking a 33% increase compared to the same period in 2024. This figure is also the highest for the first two months of the year since 2009.

The surge in layoffs comes amid concerns about economic stability, with Trump’s plans for tariffs and significant cuts to government staffing continuing to develop. While consumer surveys indicate worry about inflation and job security, some data suggest the economy is still showing signs of strength. For instance, payroll company ADP reported a modest increase of 77,000 in private sector hiring in February.

However, job cuts weren’t exclusive to federal agencies. The retail sector reported 38,956 layoffs, with companies like Macy’s and Forever 21 making significant staffing reductions. In fact, retail layoffs in 2025 have increased nearly six-fold compared to 2024. Technology companies also contributed to the cuts, laying off 14,554 workers this month, although this figure is lower than last year’s numbers.

On a brighter note, some companies announced plans to hire 34,580 new workers in February, indicating a year-to-date increase of 159% in hiring compared to the previous year. However, initial unemployment claims have risen recently, particularly in areas with a high concentration of government employees, like Washington, D.C.