’Tis the season for holiday hiring, but a leading firm that supports laid-off workers is predicting a 16-year low for end-of-year employment in the retail industry as shoppers squeezed by higher prices spend less this year.
The executive outplacement firm Challenger, Gray & Christmas estimates that retailers will add fewer than 500,000 positions between October and December, a decrease from 543,100 during the same period last year.
Hiring for the Halloween/Thanksgiving/Christmas shopping season has fallen below half a million employees only twice in the past 20 years: 324,900 in 2008 and 495,800 in 2009.
Challenger, Gray & Christmas notes that many retailers have automated customer service and extended work hours as they brace for a potential decline in holiday spending.
“Seasonal employers are facing a confluence of factors this year: tariffs loom, inflationary pressures linger, and many companies continue to rely on automation and permanent staff instead of large waves of seasonal hires,” Andy Challenger, a senior vice president at the firm, said in a statement.
Added Mr. Challenger: “With hiring slowing across the board, retailers may hire fewer workers themselves, while many of their shoppers slow spending.”
His firm’s report also estimates that the traditional seasonal spike in warehousing and shipping jobs will “underperform” this year: In the fourth quarter of 2024, the sector added 303,700 positions, down 2% from 2023 and the lowest for the period since 2019.
“Challenger forecasts a further decline in 2025, as e-commerce firms and logistics providers continue to lean on automation, flexible scheduling, and year-round staff to meet fluctuating demand,” the Chicago-based company said.
The White House pushed back on the bleak forecast in a statement to The Washington Times, citing long-term job gains expected from tariffs forcing companies to build U.S. factories.
“Industry leaders ranging from Apple to Merck to TSMC have announced trillions in historic investment commitments to make and hire in America as a result of President Trump’s tariffs,” said Kush Desai, a White House spokesman.
He cited the administration’s “aggressive pro-growth agenda of tax cuts, deregulation, and energy abundance” as key factors in economic recovery.
According to preliminary data from the Bureau of Labor Statistics, 15,550,700 people currently work in retail. That’s the highest since 2018, when 15,713,500 workers were employed.
That figure traditionally dips in September as teenagers and college students return to school, then resurges in the final quarter of the year.
The U.S. Chamber of Commerce reported Wednesday that improved optimism about cash flow and economic outlooks increased confidence to a record high among the 750 small-business owners it surveyed in July and August.
At the same time, the business lobbying group’s second-quarter survey found that 46% of owners cited inflation as their biggest challenge and 75% said rising prices had “significantly impacted” them in the past year.
It also found a growing number of small businesses investing in online customer service technology and artificial intelligence.
“This quarter’s Index reflects a resilient small business community that’s cautiously optimistic about the economy,” said Tom Sullivan, the Chamber of Commerce’s vice president of small business policy. “But high costs are still holding many back from expanding and investing.”
The National Retail Federation, an industry group that estimates holiday spending, will release its projections for this year’s season in early November.
In an email Wednesday, the trade group noted “robust” sales numbers throughout the year and predicted that shoppers will save on nonessentials to maintain holiday spending levels this year.
“While retailers are being cautious about hiring, their commitment to providing the best possible experience for consumers remains a preeminent consideration, and that is likely to result in a more normal holiday ramp-up,” the National Retail Federation said.
‘A cooling labor market’
Hiring and retail experts interviewed by The Washington Times said the Challenger, Gray & Christmas forecast reflects recent anemic job numbers.
“With the predictions outlined in the Challenger, Grey & Christmas report, the constricting of the job market — including seasonal jobs — appears to be carrying into the end of the year,” said Toni Frana, Florida-based career expert manager at FlexJobs, a work-from-home job search website.
Sam Wright, head of partnerships and operations at Huntr, a Seattle-based AI resume builder, said his company’s July to September job search data showed “a cooling labor market” that aligns with Challenger’s projection of reduced seasonal hiring.
“Employers are shifting resources while consumer demand and cost pressures, including tariffs, add to the slowdown,” Mr. Wright said.
Most hiring experts insisted that the predicted pullback in seasonal staffing stems from post-pandemic retail trends, including self-checkout, more than Trump administration tariffs on imported goods.
“My hypothesis is that this holiday season you’ll see more checkout experiences like Uniqlo, and less ‘sales-y’ experiences like Victoria’s Secret,” said Lacey Kaelani, CEO of Metaintro, a New York City-based job search engine.
According to the Challenger report, most big-box retailers have not announced seasonal hiring goals for 2025.
Target said in a recent posting that it would offer extra holiday hours to existing workers and tap into a network of 43,000 “on-demand” team members, but the retail giant did not say how many new employees it plans to add.
Kohl’s likewise confirmed that it will hire seasonal workers without specifying the number.
Among other companies, Bath & Body Works has pledged to hire 32,000 people this holiday season, including 2,000 workers in distribution centers, and Spirit Halloween plans to add 50,000 workers.
Angelica Gianchandani, a marketing instructor at New York University, said signs are emerging that 2025 could be “one of the weakest holiday hiring seasons in years” as the number of seasonal hires nationwide drops as low as 450,000.
“Companies are leaning on technology and running with smaller, more efficient teams rather than the big seasonal waves of the past,” Ms. Gianchandani said in an email.
