Anxiety Over Layoffs is Plaguing the Workforce. What’s HR’s Role?

Employees already have a handful of concerns over various uncertainties, but mounting fears around layoffs are adding another layer of stress that is reshaping how workers engage with their jobs and their employers.

During the current state of economic uncertainty and volatility, layoffs have been a common strategy as employers look to trim budgets. Starbucks, Meta, LinkedIn, the Walt Disney Company, and Walmart are among the several companies making headlines for recent downsizing.

For most employees — no matter what firm they are at — the underlying fear is that they might be next.

That’s both damaging to employees’ mental health and reverberate through behaviors and attitudes that impact the workplace. 

“When employees feel layoffs could happen at any time, it creates a constant undercurrent of stress that can lead to distraction, disengagement, and hesitation to fully invest in their work,” said Mira Greenland, chief revenue officer at INTOO, a Los Angeles-based global career development and outplacement firm.

Recent research from INTOO and the Harris Poll found that more than 60% of employed Americans are experiencing layoff anxiety, up significantly from 2019. 

That’s damaging and can cause big workplace implications, said Jasmine Escalera, career expert at career platform Zety in Miami Beach, Fla.

“Layoff anxiety is having a noticeable impact on how employees think about work, stability, and their future careers,” she said, adding that data has found many workers are prioritizing job security over compensation and are paying closer attention to how organizations communicate during periods of uncertainty. For instance, a recent survey by jobs site Monster recently found that salary is still important to recent grads, but two-thirds of soon-to-be graduates (67%) say they would accept a lower-paying job if it offered greater long-term career security.  

Article: Concerns about Economy, Layoffs Causing Incivility

So what can, or should, organizations do to address layoff concerns? Experts say company and HR leaders have a role in helping reduce uncertainty and supporting employees through periods of instability.

“This is absolutely something employers should address,” Greenland said.

Benefits Support

Because employees’ mental health is being shaken by recurring uncertainty, including fears over job security, promoting available mental health benefits and support is an important strategy.

Most employers have mental health benefits, such as an employee assistance program (EAP), in place — SHRM data finds that 81% of employers offer an EAP — so now is a great time to communicate with employees about those benefits.

“It’s vital that employers provide access to timely, compassionate, culturally competent, and evidence-based support,” especially during times of crisis or uncertainty, said Dr. Jennifer Birdsall, chief clinical officer at ComPsych, a Chicago-based mental health service provider.

“This includes ensuring their workforces know what benefits are available to them and their family members and directing them appropriately to these resources,” Birdsall said. 

E-mails, Slack messages, or updated posts to the company’s intranet reminding employees about resources, including EAPs, crisis counselors, or well-being apps — as well as how to access them — would be beneficial. Although workplace-provided mental health offerings are fairly common, the vast majority of employees are unaware of what benefits they have available through their employer: research from OneMedical found that just 19% of workers have accessed mental health care through their employer.

HR leaders can also train managers to recognize signs of stress and burnout among employees. Frontline leaders are often the first to notice changes in engagement, productivity, or morale, but many managers are not equipped to navigate conversations around mental health or job insecurity. Providing leaders with guidance on empathetic communication and available support resources can help organizations respond more proactively, experts said.

Toolkit: Creating a Mental-Health-Friendly Workplace

Prioritizing Better Communication

Much of the best strategy for addressing layoff anxiety comes down to communication and transparency. 

“Employees pay very close attention to how organizations communicate during periods of uncertainty, and many feel frustrated when communication is vague or reactive,” Greenland said. According to INTOO research, 76% of employees said they believe many recent layoffs could have been avoided with better leadership decisions, she added, “which highlights the importance of transparency and trust.”

Eliminating employee concerns entirely is unlikely to happen — especially given that employer updates or needs may need to evolve, coupled with constant news around layoffs — but HR can reduce unnecessary anxiety through consistent communication, honest conversations about business conditions, and empathetic leadership, Greenland said.

Escalera agreed. “Communication and visibility can play an important role in how employees experience organizational change,” she said. “Workers often report valuing clarity, consistency, and advance communication when possible, particularly during periods of economic uncertainty.”

That could mean sharing timely information regarding the company's financial health to replace speculation with facts and also explaining the “why” around layoffs if they do occur, or if employers are planning for them. Providing clear, honest explanations about the business reasons for any organizational changes or restructuring is vital, experts said.

HR leaders should also be mindful of so-called “survivor’s guilt” among employees who remain after workforce reductions. Employees who survive layoffs are often expected to absorb additional responsibilities while also coping with uncertainty about whether future cuts may occur. Without intentional support, organizations risk declines in morale, trust, productivity, retention, and mental well-being. That makes post-layoff communication especially critical.

“The effects of layoffs extend beyond employees who leave the organization,” Escalera noted. “Remaining employees may experience increased stress, uncertainty, or disengagement depending on how changes are communicated and managed internally.” 

Experts say that how employers handle periods of uncertainty can ultimately shape employee trust and workforce well-being — long after such volatility is over. Workers are often realistic about the economic pressures facing businesses, but they are also closely watching whether leaders communicate transparently, support employees consistently, and treat workers with empathy during difficult moments. 

“Employees don’t expect leaders to have every answer, but they do want clarity, honesty, and to feel treated with dignity throughout periods of change,” Greenland said.