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A growing number of Gen Z workers believe their jobs are at risk, with 64% fearing they could be laid off in the next year, according to new data from Allianz Life.
That figure is up from 55% just a few months ago and far exceeds the 45% of millennials and 41% of Gen Xers who share the same concern.
While overall economic indicators have remained stable, companies such as Microsoft, UPS, Dell, and BP have already laid off workers this year. A July 2 report from outplacement firm Challenger, Gray & Christmas revealed job cuts have reached their highest midyear total since the COVID-19 pandemic.
Perception vs reality in the labor market
Speaking to Newsweek, David Rice, a HR expert at People Managing People, said: “It can definitely lead to you feeling expendable. You don't feel you have influence at that stage of your career and the idea of freelancing or contract work probably feels like the Wild West to many of them.”
Although layoffs have made headlines, the most recent Job Openings and Labor Turnover Survey (JOLTS) shows that overall layoffs remain low and job growth continues. The Labor Department reported 7.8 million vacancies in May, up from 7.4 million in April.
Still, Rice noted: “They've not weathered many storms like this. Many of them still have very raw skill profiles, and all this is happening at a time when entry-level jobs are said to be in flux.”
Columbia Business School professor Rita McGrath added: “If you're young, it's often kind of last hired, first fired, and if companies aren't hiring and if they are trying to lay people off, they might be cutting their youngest, least-experienced workers who aren't yet providing a lot of value to their companies.”
Layoffs, student debt and AI impact Gen Z
Much of Gen Z’s concern is linked to the sectors they work in. “Tech has seen one of the biggest booms in layoffs,” said Rice. “Is it a coincidence that it's the sector developing AI and starting to think it needs less people? No, I don't think it is.”
Jason Leverant, president and COO at AtWork Group, said younger workers are affected by layoffs in tech and “this is likely shaping the fear and uncertainty that we're seeing from Gen Z,” although he suggested this could be a “great catalyst” for exploring other industries.
Rice also pointed to media and government job cuts. “Media has been laying people off en masse for 20 years... and the mass layoffs in government has created a ton of uncertainty.”
Economic conditions are compounding the issue. “Student debt is astronomical,” said Rice. “The average graduate finishes school with around $77,000 in debt... Rent is out of control in most major cities. This generation doesn't have assets because they simply can't afford the price.”
He added that since 1985, home prices have risen 408% while median household income has only gone up 241%.
“If you've landed a job in the NYC metro area as a young person making $80,000 a year... your CEO has ordered everyone back to the office in a metro area where a studio apartment costs $3,200 a month,” said Rice. “Does an economic downturn sound threatening to your ability to sustain yourself? Of course it does.”
Artificial intelligence is adding another layer of uncertainty. A World Economic Forum survey found that 41% of global companies expect to reduce their workforce in the next five years due to AI.
“Is it a coincidence that tech is laying people off and building AI tools at the same time? I don't think so,” said Rice. “It creates this feeling that you're training yourself for a job that might not even exist by the time you're good at it.”
He further noted that many early-career jobs are being eliminated or reimagined. “A lot of early-career roles are being reimagined or eliminated entirely. That makes it harder for young workers to even get a foot in the door.”
Leverant said AI may not be a job killer just yet. “AI is a tremendous efficiency-gaining tool, and not really able to truly take jobs away... yet.”
Still, Rice believes the psychological toll is real. “Right now, we don't have clear pathways for adapting to AI disruption. There's no universal AI literacy program, no standard upskilling route. It's just constant headlines and speculation, and that's enough to make anyone anxious, especially if you're just starting out.”
