Layoffs in Retail America are only getting worse as we approach the halfway point of 2025. In just six months, layoffs have gone up close to 300% more than what they were in 2024.
So far, close to 76,000 people have lost their jobs, a staggering amount compared to just 20,000 from the previous year. Nobody in the retail space is safe, as even the biggest companies are cutting costs, closing stores, and letting staff go.
What’s Causing Them?
There are several factors behind this chaotic and unprecedented lack of job security. Earlier in the year, tariffs were put into place that hit retailers that imported their goods especially hard.
This, coupled with inflation, operational costs, and changing consumer habits, spelled trouble for retailers, and they had no choice but to look to trim the fat. It’s sink or swim for many businesses.
The Fashion Sector
Some of the retailers that are hit the hardest are those in fashion. Popular brands like Macy’s, Forever 21, and Saks Global have all faced radical pivots and had to either close down stores or lay off employees as the reality of competition, inventory glutes, and declining sales sets in.
Even the biggest kids on the block, like Adidas and VF Corp, have laid off hundreds of employees in a desperate bid to restructure their businesses to remain profitable.
Store Closure
Stores are closing around America on an apocalyptic scale. Job cuts and store closures go hand-in-hand, as once a store is shuttered, its employees are generally displaced and retrenched rather than reassigned elsewhere.
Following a $21 billion sales drop, Macy’s is closing 150 of its locations, with Joann being hit even harder, having to close all 800 of its stores following bankruptcy, retrenching thousands of workers.
Online Shopping
Online shopping, at first, seemed like a beacon of hope to many businesses. However, their are implications on leaning so heavily into e-commerce.
Many traditional businesses struggle to adapt their models to online ordering and shipping, and this gamble has to pay off with the substantial investment that goes with it. Some of fashion’s biggest retailers are pivoting to online stores, which means fewer jobs available for employees.
Tariffs And Trade Policy
Many retailers in America depend on importing their goods from Asian hubs where manufacturing if cheaper. This meant that tariffs came abruptly, and hit hard. As companies faced increased costs overnight, many had to pivot quickly to adapt or go out of business. This meant trimming the fat, including firing many employees.
This was not an isolated incident, and many companies in the retail space showed a similar trend, where layoffs are one of the first reactions to lowered profit margins.
Consumers Are Changing
To add even more pressure to this chaotic landscape, consumers are also changing their habits and seem to be spending less than they did historically. In times of economic uncertainty, shoppers are hesitant to spend money on items that aren’t deemed essential, and fashion products are one of the first things to go.
Even when consumers are buying, they are more savvy than before and either shop online or look for deep discounts. This all means that sales aren’t going up. They’re going down.
Corporate Jobs
As retail businesses cut jobs, many would believe that it’s only storefront employees who are in danger, but it’s evolved and spread to jobs in corporate now too. Important roles in buying, design, logistics, and marketing are all facing the same retrenchment that many other employees are facing.
Businesses like VF Corp and Saks Global have started laying off their white-collar workers and are showcasing that no one is safe from layoffs in the retail space. The message is a clear one, retail is struggling, and these effects are seen in every part of the business, from store clerks to marketing professionals.
Broader Effects
Retail is one of the biggest supporters of American jobs and employs more than a quarter of all U.S. jobs. The large-scale layoffs we’ve seen at the beginning of this year alone will have ripple effects, impacting the jobs of suppliers, landlords, logistics firms, and economies.
For fashion, fewer jobs in the space mean a slowdown of new innovations, fewer frontier brand items, and stunted creativity.
The Future Of Retail
With such huge impacts, the retail landscape won’t recover from this overnight. Companies are quick to let go of employees but are careful to employ new ones.
Businesses need to stand out in this chaotic landscape to drive more customers in while keeping production costs low. For employees, the retail sector is showing troubling signs, and branching into other skills might be a good idea as we all face this uncertainty together.
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