Goldman Sachs issues grim job warning as FedEx axes 856 in Texas

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The U.S. layoff machine is slowly speeding up, and Wall Street is beginning to notice. Goldman Sachs is warning that there are "growing signs of weakness" in the U.S. employment market. Goldman Sachs analysts said that job losses may be rising, even while official statistics seem steady.

Goldman economists Manuel Abecasis and Pierfrancesco Mei weighed in.

Their statements come as FedEx says it will lay off 856 people at a key logistics center in Coppell, Texas.

The firm said the decision was due to a customer switching providers, but the job losses represent a local flashpoint in a larger national trend: Companies in all industries are slashing jobs at a rate that is seldom seen outside of a recession.

The main concern today is whether these cutbacks are just one-time actions or an indication that the employment environment is deteriorating.

Private layoff trackers paint a darker picture than official data

The official U.S. job numbers still seem good. The number of people filing for unemployment benefits remains relatively low, and the unemployment rate has increased slightly.

But information from the private sector reveals a different narrative, and it's blazing red.

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Companies disclosed more than 153,000 job cutbacks in October, the highest number for any month in over 20 years. That's a 175% rise from last year, bringing the total number of reported layoffs in 2025 to 1.1 million through October, a 65% increase from 2024.

These values are more common during a recession than during a boom year.

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The tech industry is at the forefront of downsizing, shedding the employment it gained during the pandemic boom. Retailers and logistics companies have done the same, and more recently, employment losses have also affected the food and industrial production sectors.

Goldman Sachs said this represents a shift from what Federal Reserve Chair Jerome Powell described as a "low hire, low fire" atmosphere. Hiring remains low, but firing rates are on the rise.

FedEx's Texas closure highlights new logistics risk

FedEx's decision to shut its Coppell location adds to the tale. The business said that 856 layoffs would occur over time, ending in April 2026. This is because a major customer switched to a new third-party logistics supplier.

This is a great illustration of how risk is becoming more concentrated in the third-party logistics world. Many logistics companies only work for one "anchor client." If that client goes, the whole business might suddenly become financially unviable, which is what happened in Coppell.

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It's not just one instance, either. Earlier this year, FedEx laid off more than 300 workers at a different Texas location because of a similar change in customers. Companies like UPS are also combining operations across the board, since there are fewer packages and more automation.

Logistics companies are clearly at risk, and when contracts change hands, hundreds of jobs might go in a flash.

Goldman flags deeper market weakness behind the headlines

Goldman Sachs is keeping an eye on more than just FedEx.

The company's economists are keeping an eye on early warning indicators in the job market, such as more WARN Act letters (notices of layoffs that are filed in advance) and public references of layoffs on business earnings calls.

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These signs point to more layoffs happening faster, even if jobless claims are still low. Goldman said that first jobless claims usually come in around two months after layoff announcements. This means that the true harm may not show up in official records until early 2026.

Goldman’s economists noted that workers are “increasingly struggling to secure new employment,” making rebounding after losing a paycheck especially difficult. This is a big change from the last few years, when laid-off individuals generally rapidly found jobs that were just as good or better.

Investors and workers should watch the right signals

Goldman's main point for people seeking to predict the future is to pay less attention to past statistics and more attention to future signs.

WARN warnings, announcements of layoffs at companies, and language used on earnings calls may all be signs of trouble ahead. Goldman said to keep a careful eye on these numbers, particularly Challenger layoff stories, which usually come out before official government statistics.

The businesses and jobs being targeted are also worth monitoring. So far, layoffs have mostly affected white-collar and mid-level workers.

This is a "richcession" scenario, where corporate and IT employment are hit more than frontline service jobs. Amazon's proposal to remove 14,000 jobs and Verizon's plan to shed more than 13,000 under a new turnaround plan are two recent instances.

Is AI really driving the cuts? Not so fast, says Goldman

Some businesses are saying that layoffs are part of their AI transition. But Goldman Sachs says you shouldn't believe such assertions right away.

“While AI may be increasingly considered in workforce decisions, clear evidence of layoffs directly motivated by AI remains limited,” the bank said.

The most likely reason? Cutting costs the old-fashioned way. Companies are getting the upper hand again after years of labor shortages and wage pressure, and they are cutting jobs to defend their profits.

Bottom line: FedEx’s closure is a symptom, not an outlier

The layoffs at Coppell, reported locally by Fox4 KDFW, may seem as if they affect only that company. But they mean a lot more than that — a weak supply chain, a very centralized logistics model, and a bigger change in how employers and employees interact.

Goldman's message is clear: The job market may seem strong on the surface, but there may be underlying problems.

If additional companies follow FedEx's footsteps and unemployment claims start to soar, what presently seems like a sectoral shuffle might morph into a bigger crisis.

Now is the moment for both investors and workers to stop reading the news and start looking at the fault lines.

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This story was originally published by TheStreet on Dec 1, 2025, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.