Retail job cuts spike amid economic uncertainty

The insight: Retail job cuts surged in the first two months of the year, the result of a spate of bankruptcies and cost-cutting measures from struggling companies.

• Retailers announced plans to shed over 45,000 jobs in January and February, up 572% YoY, according to a report by Challenger, Gray & Christmas.
• But those layoffs may take a while to take effect. The retail industry lost 6,300 jobs in February, per the latest Labor Department data, due mainly to strike activity at food and beverage retailers.

Going out of business: Retail bankruptcies account for the majority of job losses.

• Joann’s bankruptcy resulted in the closure of nearly 800 stores and put around 19,000 employees out of work.
• Party City’s liquidation cost 16,000 jobs, while Big Lots’ restructuring led to around 1,000 positions being eliminated.
• Liberated Brands, which operated stores for Billabong, Quiksilver, and Roxy, will close all of its 122 locations and lay off roughly 1,040 retail workers, in addition to over 360 corporate staff.
• Forever 21 plans to lay off roughly 700 employees as it prepares to file for bankruptcy again.

Zoom out: While retailers were relatively restrained with layoffs last year, 2025 is a whole new ballgame. The Trump administration’s seesawing tariff policies, government layoffs, and proposed mass deportations are undermining consumer and business confidence, creating a highly volatile environment that is already weighing on spending.

Some companies—most notably department stores, which are struggling to find their place amid shifting consumer habits—have already announced plans to downsize in response to market volatility.

• Wayfair laid off 340 tech workers, as it downsizes in response to the difficult market for furniture and home goods.
• Saks Global will lay off 5% of its corporate employees following its merger with Neiman Marcus, in addition to job losses related to its decision to close the latter’s flagship Dallas store.
• Kohl’s will cut 10% of its corporate workforce and shutter 27 underperforming stores in an attempt to break its streak of 11 consecutive quarters of declining sales.
• Macy’s plans to close 66 stores this year as part of its turnaround strategy.
• The number of store closures is expected to more than double to 15,000 this year, per Coresight Research.

Our take: The wave of layoffs reflects the uncertain outlook for consumer spending, which will be seriously pressured as tariffs push up prices and depress confidence.

The upheaval could put more retailers out of business—especially those that are already struggling to stay afloat—and force the rest to look for cost-saving measures to shore up their bottom lines.