Retail Sector Faces Historic Low in Seasonal Hiring Ahead of Holiday Season
As the holiday shopping season approaches, the retail sector is bracing for a significant downturn in seasonal hiring, with projections indicating the lowest levels since the 2009 recession. According to a report from job placement firm Challenger, Gray & Christmas, retailers are expected to hire fewer than 500,000 seasonal workers in the final quarter of 2025. This figure represents an 8% decrease from last year and marks the smallest seasonal hiring increase in 16 years.
Economic Headwinds Impacting Retail Hiring
Andy Challenger, senior vice president at Challenger, Gray & Christmas, highlighted several challenges that retailers are currently facing. “Tariffs loom, inflationary pressures linger, and many companies continue to rely on automation and permanent staff instead of large waves of seasonal hires,” he stated. This multifaceted economic landscape has led many retailers to adopt a more cautious approach to hiring, suggesting that they are preparing for a subdued holiday season.
Historically, major retailers have announced their seasonal hiring plans well in advance of the holiday rush. For instance, last year, companies like Target, Macy’s, and Aldi had already disclosed their staffing goals by this time. However, this year, there has been a notable absence of such announcements. Target, which hired 100,000 seasonal workers in 2024, is instead focusing on extending hours for its existing employees and utilizing its “On-Demand team” of approximately 43,000 flexible workers. While the company has acknowledged that it is hiring temporary staff for stores and supply chain operations, specific figures have not been released.
A Shift in Retail Strategies
The silence from major retailers regarding their seasonal hiring intentions is indicative of a broader trend. Macy’s, Burlington Stores, Aldi, and 1-800-Flowers have also refrained from announcing their seasonal hiring plans. A few companies have made hiring announcements, such as Spirit Halloween, which plans to hire 50,000 workers-consistent with last year’s figures-and Bath & Body Works, which will add 32,000 workers, a slight decrease from 32,700 in 2024. Amazon and UPS are expected to reveal their hiring figures later in the season, but the overall trend remains one of caution.
This shift in strategy reflects a growing reliance on existing staff and automation technologies. Retailers are increasingly investing in systems that allow them to operate efficiently without the need for large seasonal workforces. This trend is not entirely new; it has been gaining momentum over the past few years as companies seek to streamline operations and reduce costs.
Broader Economic Context
The cautious hiring outlook is set against a backdrop of broader economic uncertainty. Recent data indicates that job growth has slowed significantly, with nonfarm payrolls increasing by just 22,000 in August-far below expectations and a stark decline from the previous month. This slowdown has contributed to the Federal Reserve’s recent decision to cut interest rates, a move aimed at stimulating economic activity.
Consumers are also feeling the pinch, grappling with high inflation, elevated borrowing costs, and new tariffs that are driving prices higher. Credit card debt has reached record levels, leading many households to reconsider their spending habits. As a result, consumer sentiment appears to be shifting, with many shoppers expected to curtail their holiday expenditures.
Consumer Spending Trends
Reports from consulting firms further underscore the cautious outlook for the upcoming holiday season. PwC has found that shoppers plan to spend 5% less this year on gifts, travel, and entertainment, marking the first significant decline since 2020. AlixPartners has projected that holiday retail sales growth will be limited to just 3% to 5%, describing the outlook as “underwhelming.”
This anticipated decline in consumer spending is particularly concerning for retailers, as the holiday season typically accounts for a substantial portion of annual sales. The combination of economic pressures and changing consumer behavior could lead to a challenging environment for retailers, who rely heavily on this critical shopping period to bolster their bottom lines.
Historical Comparisons
Historically, the holiday shopping season has been a time of optimism for retailers, often marked by aggressive hiring and promotional campaigns. However, the current economic climate is reminiscent of the post-2008 recession period, when consumer confidence was low, and spending was restrained. The parallels between now and that era raise questions about the long-term sustainability of the retail sector, particularly as it navigates the complexities of a rapidly changing economic landscape.
Conclusion
As the retail sector prepares for what could be one of its weakest holiday seasons in over a decade, the implications for both retailers and consumers are significant. With hiring levels expected to plummet and consumer spending projected to decline, the upcoming months will be critical for assessing the resilience of the retail industry. Retailers will need to adapt to these challenges, leveraging technology and existing staff to meet consumer demands while navigating an uncertain economic environment. The decisions made in the coming weeks will likely shape the future of retail for years to come.
