Over the past year, headlines about layoffs have become alarmingly routine. From Big Tech to Main Street, no industry has been immune. And while the coverage often focuses on questions of “who” and “how many,” the deeper question is: what happens next?
What happens to the employees who remain, but must watch their colleagues pack up? What happens to the people who get the call, face the uncertainty, and must start over? And what happens to the way we all think about work when layoffs stop being rare and start feeling inevitable?
To understand how the most recent wave of layoffs is shaping the workforce, Perceptyx’s Center for Workforce Transformation surveyed more than 5,400 employees across the U.S. in February and March of this year. The results show a workforce in flux, grappling with uncertainty, navigating change, and recalibrating what they want next. Here’s what we learned.
Layoffs Are More Common Than You Think, And the Worry Runs Deep
Layoffs aren’t just a company issue. They’re personal and widespread:
- Nearly 1 in 3 workers say they’ve been laid off at some point in their careers.
- 1 in 6 workers say it’s happened within the past three months alone.
- For those who haven’t been impacted directly, many are still on edge: 33% are at least moderately worried about being laid off, and 28% admit they’re not at all prepared if it were to happen.
What’s more, layoffs aren’t happening quietly.
- 28% of workers say there are rumors of layoffs at their organization,
- 22% say they’ve received official communications about potential cuts, and
- 24% have already seen them happen within their organization.
The fear isn’t just hypothetical; it’s present, it’s growing, and it’s changing how people approach their work.
Layoffs Spark Job Hunting, Even for Those Who Stay
It might seem obvious that people who’ve been laid off are on the job hunt, but they’re not alone. Layoffs appear to have a ripple effect that drives job-seeking behavior across the board.
- Overall, 61% of employees are currently looking for a new job.
- Among those who’ve experienced a layoff before, that number jumps to 74% (versus 55% of those who have never been laid off).
- When layoffs or restructuring happen at a company, 58% of employees say they’re more likely to look elsewhere, even if their own job wasn’t affected.
Amid all the uncertainty and worry, there is a piece of good news. Employees themselves are surprisingly resilient and feel confident in their abilities. Nearly 6 in 10 think it's a good time to find a new job in their field, and more than 4 in 5 report the same or more confidence as a year ago that they could easily find a job if they wanted one.
Engagement Declines, Especially Where Layoffs Are Happening
It’s no surprise that uncertainty takes a toll on engagement. But the data shows just how much layoffs – even the perception of them — can erode employee connection and motivation.
While over half (51%) of all workers say they’re fully engaged, that drops to:
- 46% among those who’ve been laid off in the past,
- 45% at organizations that have recently undergone layoffs, and
- 44% among those at organizations where there are rumors about future layoffs.
Even rumors of an impending layoff can be enough to cause a dip. When people feel like the ground beneath them isn’t steady, it’s harder to stay focused, inspired, or committed.
Beyond job security and engagement, layoffs leave a mark on employees’ emotional and psychological health. Those who are employed by organizations that have recently undergone restructuring or layoffs report a new onset of a variety of negative health outcomes.
- 38% say their sleep has been disrupted,
- 37% report periods of anxiety,
- 35% say they’ve felt more down or in a sad mood,
- 26% admit they’ve had a shorter temper than usual, and
- 22% report binge drinking or drug use.
And the workplace dynamics shift too: more than half of workers (53%) say layoffs have made it harder to maintain friendships with co-workers, and 59% say they’re carrying extra responsibilities because their teams are understaffed.
In other words, the effects of a layoff don’t stop at the exit interview; they linger in behavior, in morale, and in the day-to-day work experience.
Transparency Helps, But It’s Not Always Enough
The way an organization handles layoffs can make a big difference. Employees were more forgiving and more confident when leadership was open, communicative, and respectful during the process. But many organizations fall short.
- Just 54% of employees said their organization communicated openly about layoffs,
- 53% say they don’t understand why the layoffs happened at all, and
- Support wasn’t consistent: no single resource (e.g., severance, extended health insurance, or job search help) was reported by more than 36% of employees (severance packages).
However, when managers and leaders do their best to communicate openly, it can be a strategy to strengthen the connection with those left behind. Of those 54% whose organizations communicated openly, a full 61% were highly engaged — a figure 3x that of those who felt communication wasn't open and honest.
What This Means for Leaders, for Workers, for the Future of Work
Layoffs are, at their core, a human story, not just a business one. They affect not just jobs, but relationships, identity, and trust. But they also create a window for change.
For workers, layoffs often lead to a moment of reflection and a chance to ask: What do I want from work? What am I willing to put up with? What am I ready to leave behind?
For leaders, layoffs are a test of values and communication. How you navigate these moments speaks volumes about culture and leaves a lasting impression on both those who go and those who stay.
And for organizations at large, the current climate is a reminder: resilience isn’t just about recovery. It’s about clarity, consistency, and caring for the people behind the job titles.
How Organizations Can Support Employees During Uncertain Times
Even when layoffs are necessary, the way they’re handled can soften the blow and preserve trust. Based on our findings, here are five strategies organizations can use to support employees before, during, and after workforce changes.
- Be Proactive, Not Just Reactive, in Communication
Share what you can, early and often. Employees who feel informed are less likely to fill the silence with fear or misinformation. Communicate the why behind decisions, what comes next, and how employees will be supported. Transparency builds trust, even in hard times. - Prioritize Employee Well-Being
Layoffs don’t just create job insecurity, they impact mental health, sleep, and emotional resilience. Offer well-being resources, normalize conversations around stress, and train managers to recognize when employees may need extra support. Small gestures of care can go a long way. - Acknowledge the Toll on Survivors
The people who stay often carry survivor’s guilt, extra work, and uncertainty about their own future. Recognize their challenges, involve them in rebuilding efforts, and create space to reset priorities and expectations. Don’t just move forward, move forward together. - Invest in Career Development
In times of uncertainty, employees want to know they still have a future at the company. Highlight internal mobility, learning opportunities, and growth paths, even if budgets are tight. When people see a path forward, they’re more likely to stay engaged and committed. - Create Meaningful Opportunities for Listening and Action
Invite feedback, listen to concerns, and act on what you hear. Employees are more likely to stay resilient when they feel their voice matters. Whether through surveys, focus groups, or manager check-ins, make listening a continuous, intentional practice — not just a one-time event.
Layoffs may be a business reality, but empathy, communication, and care are leadership choices. Organizations that invest in their people during tough moments won’t just weather the storm, they’ll earn the loyalty and trust to thrive long after it passes.
Turn Workforce Insights into Action: Partner with Perceptyx
Is your organization navigating workforce changes or concerned about employee engagement during uncertain times? Perceptyx can help you understand what your employees are truly feeling and thinking. Schedule a demo today to see how our People Insights Platform can provide the data and action planning you need to support your workforce through change. For more research like this, subscribe to our blog for the latest on employee experience, organizational resilience, and workforce transformation — delivered straight to your inbox.