US private company head count falls amid hiring slowdown, tariff woes

Employee head count in US private companies has been falling across sectors, according to an analysis of S&P Global Market Intelligence head count data for the period from July 1, 2024, to June 1, 2025.

The analyzed sectors are industrials, healthcare, information technology, consumer discretionary, financials, communication services, consumer staples, real estate, materials, energy and utilities.

Industrials experienced the largest head count reduction among all sectors over the measured period, decreasing to 8,878,707 as of June 1 from 9,054,303 as of July 1, 2024, a total reduction of 175,596, according to data from S&P Global Market Intelligence.

The consumer discretionary and information technology sectors followed, with employee reductions totaling 146,105 and 109,080, respectively, during the period.

"The biggest factor [driving the decline in head count] is slowing hiring," said Cole Napper, vice president of research, innovation and talent insights at Lightcast, a labor market intelligence firm.

Hiring has been on a downward trend since 2022, Napper said. This slowdown leads to a depressed overall head count, particularly when departures exceed new hires.

– Download a spreadsheet with data featured in this story. – Read about trends in global venture capital rounds of funding. – Explore more private equity coverage.

Napper said uncertainty around tariffs also affects business investments, with companies hesitant to make plans amid fluctuating regulations.

"It's not necessarily that tariffs are causing head count to go down. It's just businesses may or may not be making investments because of the uncertainty related to tariffs. It's hard to make business plans," he said.

Additionally, AI adoption is often assumed to be a factor in workforce reduction, but its impact has not yet been conclusively determined.

"The easier response there is that companies are trying to do more with less," Napper said. "They may have fewer employees, but are trying to maintain the same level of productivity or increase their productivity, and AI could be contributing to that increased productivity. There is no definitive answers to this yet."

Research and advisory firm Staffing Industry Analysts Inc. cited several factors contributing to declining head count, including a slowing US labor market, an ongoing manufacturing recession, low levels of employee churn and elevated cost discipline.

Largest private company head count

Industrials had the largest head count in the private sector, with research and consulting services representing approximately 21% of the total workforce within it.

McKinsey & Co. Inc. ranks as the largest private research and consulting firm with a head count of 43,963 as of June.

Head count at the firm trended down during the measured period, but a McKinsey spokesperson said "we continue to recruit robustly and will welcome thousands of new consultants to our firm this year."

Nagaraju Nuthalapati contributed to this article.

S&P Global Market Intelligence's Headcount Analytics provides a view into these trends, covering over 220 million employees and 4.5 million companies globally. Monthly updates on geography, role distribution, and seniority levels shed light on workforce shifts, even among private firms with limited visibility. Request a free trial today >>