Remote Workers More Likely to be Laid Off

News of layoffs continues to roll in. Among the latest: UPS announced Jan. 30 it is letting 12,000 employees go—mostly management and contract positions. The same day, PayPal announced plans to cut 2,500 jobs, representing 9 percent of its workforce. On Jan. 23, eBay announced 9 percent of its workforce—about 1,000 workers—would be laid off.

While it’s not clear what percentage—if any—of those layoffs involved remote workers, recent data found that in 2023, fully remote employees were 35 percent more likely to be laid off than their peers who worked full time in the office or had a hybrid schedule. They also were more likely to be passed over for promotions (31 percent), according to Live Data Technologies. The Santa Barbara, Calif.-based company analyzed a sample of 2 million white-collar workers, split evenly between remote and in-office employees.

An exclusive report from The Wall Street Journal found that executives at Wayfair, an online furniture retailer, told their staff that they were more likely to lay off their employees who worked remotely. Wayfair recently cut 13 percent of its workforce.

Sam Naficy, CEO of Prodoscore, a productivity intelligence solution based in Irvine, Calif., said basing layoffs on where an individual works is a mistake that can harm organizations.

“The evidence supporting remote-work productivity is mounting, and business leaders should be looking objectively at how their remote workers are contributing to their bottom line,” he said. “Using internal data on employee productivity, instead of gut intuition, can help companies identify key collaborators and employees that are going above and beyond behind the scenes. Ultimately, data-driven decision-making is better for people and better for business.”

The threat of layoffs for remote workers comes as CEOs at many organizations issue mandates for employees to return to work in the office or be fired. Those mandates don’t necessarily mean reporting onsite five days a week, but employers are paying attention to who is complying, with some even tracking badge swipes and warning of consequences for not returning to the office.

Among 800 U.S. employers Resume Builder surveyed in December, 95 percent said employees who don’t comply will suffer consequences, SHRM Online reported, ranging from bonuses and benefits being affected to a reduction in pay or termination.

Jay McDonald, author of Strategic Jaywalking: The Secret Sauce to Life & Leadership Excellence (Middleton McDonald Group Inc., 2022), works with CEOs and other decision-makers in business.

Most of them, he told SHRM Online, “believe that an in-person workforce is the most productive and innovative, due to ease of collaboration and stronger work relationships.”

While there are exceptions, the “out of sight, out of mind” cliche “is very much in play,” he noted.

“When it comes time for promotions or layoffs, leadership looks to the value employees bring to the company. If they see someone on a daily basis, they are more likely to know their contributions and think of them when it comes to opportunities. Unfortunately, if an employee is not having regular conversations in the hallways or sharing the elevator or in the breakroom at the same time, they become less memorable and more like a set of data versus a real person.”

However, when evaluating where cuts are made, an employer should start by looking at those “providing the least amount of value to the company. What is someone’s pay relative to their contribution?”
McDonald also pointed out that if a role can be performed by a fully remote worker, there’s the possibility it could be offshored at up to 20 percent of the domestic cost.

He offered some advice for remote workers who have full-time in-office co-workers:

• Know how to measure your productivity and value to the company versus those who are not remote.
• Know how to convey those metrics to management.
• Know exactly what it takes to be considered for a promotion.
• Be visible to decision-makers and ask questions.

“The work relationship factor in advancement gets underestimated,” McDonald said. “Many times, who you know and how well you know them plays a major role in whether or not you are considered.”

Other SHRM Resources:

Conducting a Remote Layoff, SHRM Topics & Tools
The Hazards of Remote Employee Layoffs: Wage and Hour Issues, Severance Agreements, and Unemployment Claims, SHRM Online, June 30, 2022