Nearly half of American workers face layoff anxiety despite a record-low unemployment rate. According to a survey by Intoo regarding the Layoff Anxiety Study, out of 2,204 U.S. adults and employed, 1,061 displayed anxieties about layoffs. People remain impacted by their harrowing experiences during The Great Recession and are terrified of any forthcoming recession.
Table of Contents
The Infographic Below Details the Layoff Anxiety
- What is forcing it?
- Who is experiencing it?
- How ready are American employees for a likely layoff?
Critical Features
Laying off is not unusual
- 40% of Americans have faced layoffs or been fired from a job at least once in their career.
Layoff stress is due to an impending recession, the rumor mill, or recent layoffs at work
- 48%, i.e., almost half of employed Americans, have layoff anxiety.
- 34%, i.e., nearly one-third, fear a pending recession, 32% believe in rumors floating around, and 30% are anxious about recent layoffs at the workplace.
Young adults suffer more from layoff anxiety than older employees
- 61% of young Americans between 18-34 get layoff anxiety compared to 41% of adults aged 35+.
- 52% of employed Americans aged 18-54 feel unprepared for a layoff.
- 30% of older Americans (55+) feel less anxious.
The Impact of the Recession on workers is apparent and displayed in layoff anxiety
- 68%, i.e., 7 out of 10 employed Americans who faced a layoff/discharge from the job during the Great Recession, experienced joblessness, while nearly 2 in 5 (39%) faced layoffs and 15% were terminated.
- 74%, i.e., almost one-third of those who experienced a layoff/termination/joblessness during the Great Recession, confirm they suffer from layoff anxiety.
Workers are ill-prepared for a likely layoff
- 47% of employed Americans say they are not prepared to be laid off.
- 51% of those aged 18-34, i.e., more than half of young workers who experienced a layoff/termination/joblessness during the Great Recession (55%), still feel unprepared for a layoff.
- Less skilled employees find it challenging to find or switch jobs during a recession. Millennials aged 18-34 (26%) and those aged 35-44 (20%) are about twice as likely to have found it challenging to find/switch jobs compared to people between 45-54 (11%) and 55-64 (10%).
Layoff preparedness varies in demographic groups, and 53% of employed Americans are somewhat prepared
- Childless employed Americans (57%) are probably more prepared for a layoff than those employed with children (under 18) in the household (47%).
- Employed renters (37%) remain less ready for dismissal than homeowners (58%).
- Employees with a college degree or higher (64%) stay more prepared than employed adults with some college degree (48%) or a high school grader or less (43%).
- Married employed Americans (60%) are more prepared than unmarried but employed Americans (46%).
Women are less prepared for a layoff than men
- 46% of employed women feel somewhat prepared for a layoff compared to 59% of employed men.
- 39% of employed women suffer from layoff anxiety. Fear of pending recession is one of the foremost reasons for their layoff anxiety, whereas 29% of men feel the same.
Men are more susceptible to job loss than women
- 40% of Americans have faced layoffs or termination from a job at least once in their lifetime.
- Men are more prone to layoffs.
- 45% of men lost their jobs compared to 36% of women.
- Men have lost jobs more than women. 12% of men have lost employment three or more times, compared to 4% of women.
College grads face fewer layoffs than those without college degrees
- 64% of Americans with college degrees or higher have not been laid off compared to 48% of Americans with some college and 47% with a high school degree or less.
Takeaways for Employers
Be prepared
The layoff has become extremely common among the U.S. workforce and slowly catching up with the rest of the world. Companies should tackle and address these worries head-on. The leaders and H.R. professionals should try to clear unwarranted fear from the employees’ minds and prepare them well for unexpected business environment changes.
With proactive management to handle layoff anxiety, employers can boost employee morale, increase productivity, reduce turnover, and make agile business decisions if inevitable economic shifts arise.
Three steps for handling layoff anxiety
1. Share Info with employees. The fear of the unknown kills the employees mentally. Try to keep them on the same page, particularly during mergers and acquisitions (M&As), leadership changes, or shifts in business direction. Forestall rumors by communicating if there is no possibility of layoff. If some organizational shifts are planned in the offing, inform the scope of changes as early as business conditions allow. To keep them from crucial information is counted as wrong.
2. Keep a layoff plan handy. If layoffs emerge unexpectedly, companies should have layoff plans ready at all times. Layoffs involve a lot of legal, financial, and personal details to manage. To plan the layoffs comprehensively, download the Reduction-In-Force Checklist, which summarizes 16 steps to address a reduction in force.
3. An outplacement service. It is ideal to provide workers with outplacement services to help them land new jobs after the layoff. You may retain a positive relationship with your former employers, forestall lawsuits, and might also protect your employer brand. Put an outplacement plan when your company is not planning a reduction in force. You’ll be able to focus on the affected employees if you have the plan ready.
Twitter Layoffs as An Example
1. Don’t act in haste
Former Twitter CEO Jack Dorsey suggested cuts since the company was overstaffed; Musk took action by laying off as soon as he took over. There needed more time to evaluate cuts from a performance and a financial perspective. It could have helped redeploy high-performing employees in areas where they might need them.
Suppose you are planning exits for your employees; an out plan helps to avoid unwarranted errors, such as firing employees by mistake or dismissing team members who are essential to operations. It also helps to create a discreet plan for the notification process. It may account for the potential outcomes of the layoffs. For instance, all of Twitter’s employees faced layoffs simultaneously; it did not matter whether they were in the U.S., U.K., or India. Some stayed up all night to discover their fate, while others had to learn the news upon waking up. An alternative plan might have considered different time zones and timed notifications accordingly.
2. Clear, Thoughtful, and Sensitive Transmission
When executing a layoff, it’s crucial that communications — whether made in person, by phone, virtually, or by email — be managed sensitively, thoughtfully, and responsibly. The notices should include the reasons for the layoff and how employees and roles were chosen for elimination. And the note should have details of how this will impact the recipients. Layoffs are undesirable, extremely stressful, and cause anxiety. Employees — impacted and those staying — should be treated with care, or else your business may face the consequences of poor company reviews, bad press, and dipping productivity.
The internal notice Twitter employees received was signed “Twitter,” instead of coming from Musk himself or somebody else in leadership, or someone in human resources. Whatever might have been the reason for this choice, this impersonal message left employees feeling that they were regarded as numbers rather than humans.
3. Avoid Negative Consequences
Layoffs can have negative repercussions for a company, and you can handle those consequences if the CEO feels responsible and communicates the difficulty with which they made decisions. In Twitter’s case, former CEO Jack Dorsey addressed the employees following the layoffs to apologize for the actions, attributing the reasons to his growing the company too fast.
Admit that layoffs are unfortunate and challenging for those who were leaving and those remaining. Also, explain how you will care for those impacted as they exit.
4. Inform before Laying off
It is always courteous to provide complete information before elimination. Twitter announced, “Today is your last working day at the company, however, you will remain employed by Twitter and will receive compensation and benefits through your separation date of February 2, 2023.” However, these two months of the compensation would be considered as pay since they would still be employed, although not permitted to work during that time, which meant they would receive one month of severance pay. Some impacted employees had not received separation understandings and were told they’d receive more information in a week. They communicated to employees at the time of notification through email and did not mention the whole severance package—many impacted employees were uncertain about their futures.
5. Adherence to WARN Act guidelines
The WARN Act specifies that companies with 100+ employees give 60 days’ notification before initiating mass layoffs. They can also provide 60 days of severance pay in place of the notice. This federal law holds a financial penalty. Elon Musk claims to have given three months’ severance to every employee he laid off. Yet, they will also remain company employees for the first two months. However, they are not allowed to work. Class-action suits have already been filed against Twitter. While there may not be any financial impact on the company, such lawsuits can drain resources and hurt an organization’s stature. Taking more time for the notifications allows for a more transparent commitment to the federal and any similar state laws.
Nearly 38,000 Layoffs Added Globally: Microsoft, Netflix, Snapchat, Facebook, and Amazon
Almost 38,000 employees faced layoffs in just the first half of November 2022. The data shows 37,866 people have been terminated from their jobs globally since November 16.
Meta of Facebook had the most significant downsizing spree. On November 9, Meta terminated 11,000 employees, and Amazon sacked 10,000 people on November 16. Microblogging site Twitter laid off 3,700 people on November 4. The following big tech companies have laid off employees in massive numbers.
Microsoft
Microsoft is also facing an economic downturn despite being one of the pioneers in big tech. Around 1000 employees faced layoffs in the last month alone; this was the company’s third round of downsizing this year.
Netflix
The OTT giant Netflix impacted by inflation and the economic slowdown despite its growth at a breakneck speed in the past decade, went through two downsizing rounds. Netflix fired at least 500 employees.
Snapchat
The popular social media platform Snap, or Snapchat, has also laid off 20% of its employees, i.e., over 1000 people, in August this year.
Facebook parent company Meta cut jobs to lower costs, and Facebook also first stopped hiring. At the behest of Meta, Altimeter Capital Management urged Mark Zuckerberg to lay off people to fix their finances.
Amazon
Amazon, the retail aggregator, will start laying off from its healthcare division, Amazon Care.
The job cuts of approximately 10,000, starting soon, would focus on the company’s devices organization, retail division, and human resources.
Takeaways
- Be ready to face organizational change, including layoffs.
- Companies must have processes and resources to safeguard their company and employees.
- Find an outplacement provider before you need one.
- Train, upskill, and reskill your crew to increase retention chances.
- Be transparent with your employees.
- Take lessons from Tech and Financial Services Layoffs.
