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 aren’t just a company issue. They’re personal and widespread:
What’s more, layoffs aren’t happening quietly.
The fear isn’t just hypothetical; it’s present, it’s growing, and it’s changing how people approach their work.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.