Why are transformer cores made of laminated sheets?

Transformer cores use thin laminated sheets (0.35-0.5mm) of silicon steel to reduce eddy current losses. Eddy currents are circular currents induced in the core by changing flux. Solid cores would have large eddy current losses (proportional to thickness squared). Laminations, insulated from each other by oxide coating or varnish, limit eddy current paths to small loops within each lamination, reducing losses by a factor of 100 or more compared to solid cores.