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Job market slows as layoffs mount: 12 steps to prepare for what's next
Yahia Barakah October 28, 2025 at 9:37 PM
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The job market is in trouble as recovery remains elusive: 12 steps to stay safe (skynesher via Getty Images)
The job market continues to struggle, and the latest data confirms what workers have been sensing for months. Private-sector employers shed 32,000 jobs in September — the first monthly job loss since early 2024 — according to payroll giant ADP. More recently, preliminary weekly estimates show modest gains averaging just 14,250 jobs over the four weeks ending October 11.
With the federal government shutdown pausing official Bureau of Labor Statistics releases, ADP's employment data has become critical for tracking labor market trends. This data shows that hiring peaked last fall, then deteriorated sharply starting in late spring. A July rebound quickly faded as losses accumulated in August and September, and finding a new job now takes longer than it has in years.
This trajectory shows a job market that is losing momentum. Whether you're currently employed, hunting for work or eyeing retirement, these shifts affect your wallet and future plans. Here's how you can prepare.
What these job market numbers actually mean
When economists say hiring has "stalled," they mean employers have basically stopped expanding their workforce. The September ADP report showed an actual contraction — a loss of 32,000 private-sector jobs. Even the recent uptick in weekly data showing 14,250 weekly jobs created over four weeks barely moves the needle for an economy with over 160 million workers.
The underlying data reveals additional challenges. Small businesses bore the brunt of September's losses, shedding 40,000 positions, while large establishments added 33,000 jobs. This suggests that smaller employers — often the backbone of local economies — face particular pressure.
Pay growth also shows signs of cooling. Year-over-year wage increases for workers who stayed in their jobs held steady at 4.5% in September, according to ADP. Workers who changed jobs saw pay gains slow to 6.6% from 7.1% in August, led by declining wage growth in leisure, hospitality and financial services.
How the jobs data gets collected
ADP's employment reports draw from anonymized weekly payroll data covering more than 26 million private-sector employees in the United States. The company now releases preliminary weekly estimates each Tuesday, offering the most current view of hiring trends. A comprehensive monthly report follows on the first Wednesday of each month.
The official government data comes from two separate BLS surveys: one that includes about 60,000 households, and another that collects payroll information from over 121,000 businesses each month. Both surveys follow established protocols with multiple layers of review and cross-checking. However, with the government shutdown, these official releases remain on hold, making private-sector data from companies like ADP even more valuable for tracking economic trends.
This extensive data collection process helps explain why changing personnel doesn't alter the underlying numbers. The BLS has strict internal procedures specifically designed to keep the commissioner and other political appointees from seeing the reports early. When the jobs numbers come out, the commissioner, the media and the public get them at exactly the same time.
How to prepare for a weaker job market
Whether you're working, job hunting or eyeing retirement, here's how to adjust your strategy.
1. If you're currently employed
A slowing job market doesn't mean mass layoffs are coming, but it does mean you should shore up your financial defenses. Companies tend to freeze hiring before they start cutting jobs, so a wise strategy is to hope for the best and prepare for the worst.
Build a bigger safety net. The standard advice calls for three to six months of expenses in an emergency fund, but as it's taking more people longer to find new jobs, you might want to stretch that to nine or 12 months. Make sure to put your emergency fund in a high-yield savings account to keep your cash growing.
Lock in any workplace benefits. If your employer offers matching 401(k) contributions, make sure you're getting the full match. Also, review your HSA and FSA benefits for additional matches. Some companies choose to cut benefits instead of cutting jobs, so maximize what's available now.
Update your professional network. Start reconnecting with former colleagues and industry contacts before you need them. When the job market tightens, having warm connections becomes even more valuable than cold applications.
Consider skill building. A slower job market often means employers become pickier about qualifications. Use any downtime to earn certifications or learn new skills that could make you more valuable in your current role or more attractive to future employers.
Learn more: How to build an emergency fund
2. If you're looking for work
More people have been collecting unemployment benefits in recent months, and a growing number are staying jobless for extended periods. This data suggests job hunting may take longer and require more patience and persistence than in recent years.
Expand your timeline. What used to take two months might now take longer, especially with hiring processes becoming more drawn out. Adjust your budget and expectations accordingly. If you're receiving unemployment benefits, check how long your coverage lasts and look into any job training programs your state offers.
Cast a wider net. With job openings near their lowest level since the pandemic, you might need to consider positions slightly outside your preferred role, location or salary range. Remote work options could expand your geographic reach without requiring a move.
Target smaller companies. Large corporations often slow down or even freeze hiring during uncertain times, but smaller businesses might still need specific skills. They also tend to move faster in their hiring process, so you might see quicker results.
Negotiate differently. In a tight job market, employers might not budge much on salary, but they could be flexible on other benefits like flexible schedules, professional development budgets or extra time off.
Learn more: Best jobs for mature workers: 10 second-act careers plus 13 side gigs
3. If you're planning to retire
A weakening job market could actually push more people toward retirement, either by choice or circumstance. If you're in your 50s or 60s, you can still take steps to protect your future plans and finances.
Don't panic about your investments. Job market slowdowns don't automatically translate into a recession, but they can increase stock market volatility. If you're within a few years of retirement, make sure you have enough in stable, accessible accounts to ride out any short-term turbulence.
Tackle high-interest debt now. If you're carrying credit card balances or other high-rate debt, a weak job market makes paying these off even more urgent. Entering retirement with monthly debt payments puts extra pressure on your fixed income, especially if finding part-time work becomes harder.
Plan for health care gaps. If you lose your job in your early 60s, you might face a coverage gap before Medicare kicks in at 65. Research your health insurance options now, including COBRA and marketplace plans.
Review your retirement income sources. Look at your mix of Social Security, pensions, 401(k) withdrawals and any part-time work you were planning — diversifying these sources can provide more stability.
Learn more: Can you really retire with $500,000 in savings and investments? (Yes, it's possible)
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