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For years, the holiday season has been a lifeline for retailers and workers seeking extra income before year's end. In 2025, that safety net may be disappearing.

A new report from job placement firm Challenger, Gray & Christmas shows that seasonal retail hiring is expected to fall to its lowest level since 2009. (1) Employers aren't bringing on the usual wave of temporary workers, and for those relying on those paychecks to help cover gifts, bills, or rent, the timing couldn't be worse.

The slowdown in hiring reflects broader trends in the labor market and potential weakness in the economy. As retailers scale back, it suggests softer consumer spending, which fuels nearly 70% of the U.S. economy. (2)

“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, workplace expert and Senior Vice President at Challenger, Gray & Christmas, told CNBC.“This year may be more about doing more with less.” (3)

“While we could see a late hiring push if holiday sales surprise to the upside, the cautious pace of announcements so far suggests that companies are not betting on a big seasonal surge. This year may be more about doing more with less,” he added.

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What the numbers show

Challenger, Gray & Christmas projects that retailers will add fewer than 500,000 workers this holiday season, the smallest seasonal hiring gain in 16 years.

The slowdown is particularly notable given the holiday season's significance to retailers. According to data from Statista, holiday sales in November and December accounted for an average of 18.4% of total annual retail sales in 2023. However, for some specialty retailers, such as toy and hobby shops, that figure accounted for more than 25%. (4)

So why the sudden pullback? Retailers are bracing for weaker holiday sales due to economic pressure, such as ongoing inflation and uncertainty from global trade disputes. In short, retailers don't expect consumers to spend like they used to, so they are hiring less.

What holiday spending will look like

Shoppers are expected to spend cautiously the season, with the average household budgets feeling the strain of higher food prices, housing, and credit card costs.

A PwC survey reports that consumers expect to spend an average of 5% less during the 2025 holiday season, suggesting families may cut back on non-essentials and search harder for deals. (5)

That could spell trouble for stores hoping for a year-end boost, and for workers who've historically relied on seasonal jobs to supplement their income. Less spending means fewer sales associates on the floor, fewer packages moving through warehouses, and fewer drivers delivering gifts.

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The ripple effects

The drop in seasonal hiring is a snapshot of the job market's shifting dynamics. While unemployment remains relatively low, wage growth has slowed, and job openings have tightened across multiple industries. (6) Retail has been hit especially hard: after years of expansion in e-commerce and logistics, companies are now retrenching.

Seasonal retail work has long served as an entry point for younger workers, retirees seeking additional income, and families in need of a stopgap. With fewer positions available, many of those groups could be shut out of the holiday labor market entirely.

In short, expect the holiday season to feel leaner on both sides of the register.

Still, there are ways for shoppers to make the most of the season:

Start early: With retailers carrying slimmer inventories and fewer staff, waiting until the last minute could result in higher prices and shipping delays.

Stick to a budget: Write down exactly what you can afford to spend before hitting“checkout.” Holiday debt often lingers long after the wrapping paper's gone.

Hunt for discounts: Many stores will launch promotions earlier in the season to attract cautious shoppers. Signing up for alerts and loyalty programs can help.

Get creative: If money is tight, consider non-traditional gifts. Homemade items, experiences, or group gifts can stretch dollars further without sacrificing meaning.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Challenger, Gray & Christmas (1 ); Reuters (2 ); CNBC (3; Statista (4 ); PwC (5 ); BBVA Research (6 ).

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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