It’s not your imagination: layoffs are widespread
If you’ve spent even a bit of time on LinkedIn this year, you’ll have noticed a concerning trend: people sharing with their network that they’ve been laid off from their jobs and are now “open to work.” The headlines tell a similar story, and announcements of fresh job cuts, often numbering in the tens of thousands of employees, feel like a daily occurrence.
In fact, it’s more than just a feeling: in 2023, layoffs have been, and continue to be, both widespread and deep. That’s what we found when we surveyed more than 2,500 HR leaders from companies with 500+ employees, as well as 7,000 white-collar workers, in Australia, Canada, France, the UK, and the United States. Our goal was to learn more about their expectations, hopes, and fears about layoffs this year and beyond.
Almost half (47%) of the HR leaders said their organization is planning or has already carried out layoffs in 2023; 30% said their organization is considering downsizing. This means that 77% of the organizations we surveyed are either undertaking or contemplating layoffs. The most common reasons given to explain these layoffs were that companies over-hired in previous years (41%), that they were looking to reduce costs (40%) or restructure (39%), or that their businesses had underperformed (38%).
What sets this wave of layoffs apart from anything seen in recent years is not just how widespread they are, but how deep they run. Surveyed HR leaders expect layoffs to affect around a fifth of their workforces. Layoffs of such a scale can bring both business and reputational risks, and need to be handled with care to avoid blowback.
The anxiety factor
For employees, even the threat of layoffs can be anxiety-inducing. Over one-third (36%) of the workers we spoke to were worried about being laid off by their current employer, while 45% expressed fears that layoffs in their industry might affect their future career prospects.
Even for those people who have managed to hold onto their jobs, the instability has had a negative impact, and the workers we surveyed reported feeling stretched to the point of burnout, as they scramble to absorb the work once done by their laid-off colleagues. A majority (56%) of workers said their team, unit or division had been reduced as a result of layoffs in the past 12 months, and 72% said their team has been burned out in the past year due to uncertainty and increased workloads.
The result? Less engaged workers who are polishing up their CVs or resumes. Almost one-fifth (18%) of workers said they were less engaged at work because of the planned or executed layoffs; the same proportion said they were considering leaving their employer.
This hasn’t gone unnoticed by HR leaders. Of those we surveyed, 35% said they were concerned layoffs would lead their remaining workforce to become disengaged, and 34% said they were worried people they wanted to retain would resign. In fact, less than 1% of HR leaders said they had no concerns about knock-on effects on the broader business from layoffs, suggesting that the consequences of this year’s reduction in workforces could be felt for a long time to come.
To learn more about layoff trends, and how business leaders should respond, download the full research.