2025 November Labor Market Analysis: Rising Job Cuts, Workforce Uncertainty, and Value Spending Shift

This analysis is based on the 2025-12-04 PYMNTS report [1] and complementary labor market data, revealing a complex labor landscape with mixed signals. November 2025 job cut announcements reached 71,321, a 24% year-over-year increase, pushing the year-to-date total to over 1.1 million—one of the highest figures since 1993 [2][3]. The technology sector leads with 153,536 job cuts (partially due to AI adoption, responsible for 54k+ cuts YTD [2]), followed by retail (91,954) and services (69,089) [2]. ADP data shows a surprise loss of 32,000 private sector jobs (small businesses cut 120k, large firms added 90k) [3][4]. Contradictorily, jobless claims fell to a 3-year low [1], likely due to seasonal hiring adjustments or delayed layoffs amid uncertainty.

Workforce sentiment reflects growing unease: job security sentiment among hourly workers dropped 5.3 points in November, and wages slipped for labor economy workers [1]. This uncertainty has driven a shift to value-focused consumer spending, evident in Q3 2025 earnings from Dollar General and Dollar Tree [1].

1. Contradictory Labor Signals
   : The disconnect between low jobless claims and rising job cuts/payroll losses underscores the need for nuanced interpretation of labor data [1][3].
2. AI as a Job Cut Driver
   : Technology sector cuts are significantly influenced by AI adoption, a trend accelerating in 2025 [2].
3. Small Business Vulnerability
   : Small businesses bore the brunt of November payroll losses, cutting 120k jobs while large firms expanded [3].
4. Spending Shift vs. Total Spending
   : Workers are not reducing total spending but reallocating to value purchases, impacting non-discount retailers [1].
5. Monetary Policy Impact
   : Weak labor data has raised December 2025 Fed rate cut odds to 89%, as policymakers prioritize growth support [3].

• Reduced labor force participation or increased underemployment due to sustained job cuts and declining job security [0].
• Profitability pressure on non-discount retailers as consumers shift to value options [1].
• Uncertainty around the timing and magnitude of Fed rate cuts [3].

• Discount retailers (Dollar General, Dollar Tree) may benefit from continued value spending [1].
• A December Fed rate cut could ease borrowing costs for businesses and consumers [3].

This analysis consolidates the following critical data points:

• November 2025 job cuts: 71,321 (+24% YoY), YTD: 1.1M [2][3].
• Sector job cuts: Tech (153k+), Retail (91k+), Services (69k+) [2].
• ADP private payrolls: -32k (small businesses: -120k, large firms: +90k) [3][4].
• Job security sentiment: -5.3 points in November, wage stagnation for hourly workers [1].
• Consumer spending: Shift to value purchases (Dollar General/Tree examples) [1].
• Fed rate cut odds: 89% for December 2025 [3].