Thousands of locations shuttered and nearly 93,000 retail jobs cut as the industry faces a perfect storm of pressures
The American retail landscape underwent a dramatic reshaping in 2025, as a convergence of tariff-driven cost increases, evolving consumer behavior, and intensifying e-commerce competition drove store closures past 2,700 locations and pushed retail job cuts to their highest levels in years.
Outplacement firm Challenger, Gray & Christmas reported that retailers announced 92,989 job cuts during the year, a staggering 123 percent increase from 2024. The retail sector ranked as the second-hardest-hit industry for layoffs, trailing only the federal government. Through just the first five months of the year, employers across all sectors had announced roughly 696,000 job cuts, an 80 percent jump over the same period the prior year.
The closures touched virtually every corner of the retail world. Macy’s shuttered at least 66 stores as part of a broader plan to close 150 locations by the end of 2026. JCPenney entered Chapter 11 bankruptcy and closed stores in multiple states. Crafts retailer Joann confirmed it would close all remaining locations after its second bankruptcy filing in less than a year. Fast-fashion chain Forever 21 exited the US market entirely, unable to compete with rivals Shein and Temu.
Rite Aid completed the closure of roughly 1,250 stores, selling most locations to rival pharmacy chains. GameStop, which had already shuttered 590 US locations the prior year, planned to close a significant number of additional stores. Other notable closures came from Kohl’s, which shuttered 27 underperforming locations; Carter’s, which announced plans to close 150 low-margin stores over three years; and Claire’s, which planned to shut 291 stores as part of its own bankruptcy process.
Major corporations also trimmed their corporate workforces. In October, Target announced it would cut 1,000 corporate staff and eliminate 800 open roles, representing about 8 percent of its global headquarters workforce. Amazon disclosed plans to cut approximately 14,000 corporate positions. Puma revealed it would eliminate about 900 jobs globally.
Industry analysts point to a confluence of structural and cyclical forces behind the wave. UBS analysts have projected that an additional 45,000 stores could close by 2029 as retail’s physical footprint continues shifting toward fulfillment and distribution centers. Tariff-related cost pressures compounded existing challenges, particularly for retailers dependent on imported goods.
Consumer behavior has shifted decisively. McKinsey research showed that 75 percent of consumers reported trading down in at least one product category during 2025, while spending intentions for discretionary items turned sharply negative across all income groups. The Conference Board’s Consumer Confidence Index collapsed to 84.5 in January 2026, with the expectations component falling to 65.1—well below the threshold of 80 that typically signals recession risk.
Not all players are retreating, however. Larger retailers including Walmart, Costco, Target, and Home Depot have announced expansion plans even as competitors close their doors. The divergence underscores a growing consolidation trend in which scale and operational efficiency increasingly determine which retailers survive the ongoing transformation of American commerce.
Sources
1. “Retail layoffs rose 123% in 2025” — eMarketer, January 8, 2026. https://www.emarketer.com/content/retail-layoffs-2025-labor-market-weakness-consumer-spending-2026
2. “Joann, Macy’s, other store closures part of a 274% spike in retail layoffs in 2025” — Fox Business, June 9, 2025. https://www.foxbusiness.com/economy/joann-macys-other-store-closures-part-274-spike-retail-layoffs-2025
3. “Retail industry remains one of ‘hardest hit’ from 2025 job cuts” — Retail Dive, November 7, 2025. https://www.retaildive.com/news/retail-industry-hardest-hit-2025-job-cuts-layoffs/804999/
4. “These Retail Stores And Restaurants Closed In 2025: See The List” — Patch, December 31, 2025. https://patch.com/us/across-america/these-retail-stores-restaurants-closed-2025-see-list
5. “So much for saving layoff announcements until after the holidays” — HR Brew, December 9, 2025. https://www.hr-brew.com/stories/2025/12/09/employers-layoffs-holiday-season
