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Understandably, many employees and HR professionals are worried about layoffs. Job cuts have been all over the news so far in 2024, concentrated in the finance and technology sectors. PayPal, Microsoft, eBay, Hubspot, TikTok, Google, and Amazon are among the well-known companies to announce layoffs.
These events make the headlines and employees feel uncertain, anxious for their future, and worried about their ability to find a new job if the worst does happen. But is the picture as bad as it seems?
Are layoffs ‘looming’ – or nothing to be worried about?
The reality isn’t all doom, gloom, and ‘loom’.
"Layoffs are not out of control, regardless of what the media wants you to believe," writes Tim Sackett, a Top 10 Global HR Influencer," in a post on LinkedIn that sparked debate on the issue. "Hiring is somewhat normal, and layoffs are low. Unemployment is still outrageously low from a historical perspective. Finding great talent remains hard."
Whilst layoffs did spike from December to January, monthly job cuts had been trending down since January 2023. Election years also often bring spikes in January layoffs as companies try to get their ducks in a row.
Moreover, and perhaps most importantly layoffs continue to be historically low compared to data from the past 20 years.
Whilst the headlines feel relentless, and the concentration of layoffs at technology companies looking to cut costs or shift to AI appears to be alarming, these layoffs are only in the tens of thousands. For context, a usual month sees layoffs in the millions, and in March and April 2020, the figures spiked to 22 million.
Consider also that according to the Bureau of Labor Statistics January Jobs Report, the U.S. economy added 353,000 jobs in January, despite the usual hit from seasonal workers finishing short-term contracts. Unemployment also remained at 3.7%
On the whole, the U.S. economy is booming, and jobs have rarely – at least in the past twenty years – been safer.
So, with that in mind, employees can forget their troubles, and HR professionals can rest easy, safe in the knowledge that there is nothing to worry about.
Ah, should it be so simple.
The data is a broad sweep across all industries which doesn't reveal the issues felt by workers in particular sectors such as technology or advertising. "Advertising/Marketing/PR (and even Pharma) has experienced a weaker job market with more layoffs than I've seen in 25 years," writes one recruiter, in the comments of Sackett's post. "This is beyond what "the media" wants us to believe - it's the sad reality for many."
Another user - a recruiter for Hubspot - points out that roles impacted by restructures are not included as layoffs in the data but feed into worker concerns.
Clearly there are still widespread worries that HR must address.
If workers are worried, HR has work to do
It’s safe to say the headlines around layoffs won’t abate any time soon. Although the data may point to the contrary, employees will continue to worry whilst they continue to see the names of companies they recognize making cuts. Especially for those working in big tech, finance, and media, there is a pattern emerging among those considered market leaders.
Confirmation bias dictates employees who are concerned about layoffs will seek out information that feeds into their fears – of which there is plenty – rather than the data that does not.
There are also valid concerns with the way layoffs themselves are being conducted. Virtual layoffs over video calls have become commonplace, leading some workers – notably, an account executive who was part of a mass round of layoffs at Cloudflare – to film themselves being laid off and share the incident on social media.
"What is low is how layoffs are being handled and frankly horrifically mismanaged," says one comment from a workforce analyst and strategist at IDC. "Amassed employer power is being lorded over employees as they are being treated more like stats than ever in many of these layoffs - and then employers complain about engagement and loyalty when things like this are cratering employee trust in stable employment."
Another commenter - a CHRO working in the insurance industry - agrees with this analysis. "The is not that they are high or low," he writes. "The issue is how companies choose to conduct layoffs via mass teams calls. Companies have the responsibility to take the time to do one on ones and transition people. It is our responsibility as leaders."
Indeed, these incidents feed into fears about layoffs and how workers are perceived by their employers, particularly when such incidents go viral. HR teams should be aware that when layoffs become part of the day-to-day social or traditional media employees consume, psychological safety may be under threat. To keep employees feeling safe, secure, and settled in their roles – and engaged, motivated, and productive in turn – HR should be transparent with employees about the health of the business and any plans for major transformations that may impact job security such as shifts toward AI-centric work.
When employees are worried and uncertain, silence will only compound fears that job cuts are coming. No news is not good news where layoffs are concerned, and HR should tackle these concerns head on rather than letting them bubble under the surface.
