Skip NavigationVague hints at layoffs ahead could leave workers rattled.Klaus Vedfelt | Digitalvision | Getty Images
As companies hint at layoffs ahead without sharing specifics, employees are left wondering who will be on the chopping block — and when.
Nike CEO Elliott Hill said on Oct. 1 that changes to its operating model “will result in fewer roles,” with decisions on impacted roles coming in “2027 and beyond.” Following the Paramount-Warner Bros. Discovery merger, Skydance CEO David Ellison and co-CEO Ynon Kreiz wrote that such deals “bring change, including difficult decisions that affect our workforce.” On Oct. 12, Kroger CEO Greg Foran told staff of plans to cut 3,000 corporate jobs over the next three years as “technology is reshaping what’s possible.”
Word of coming layoffs, in some cases months or years out, can hurt productivity and spur worker anxiety in the absence of a timeline or more concrete information. It could also help win over investors and give employees a head start to head out.
Announcing cuts without specifying who will be affected or when is a departure from the norm: Often, companies alert affected employees on the day that will be their last, says Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University. But that approach is “very dysfunctional” and “really destructive of both reputation and employee well-being,” she adds.
A bigger heads-up causes “a lot more anxiety than a sudden dropping of the hammer,” Rousseau adds, although it “does give employees more options.”
Why companies are warning workers about layoffs early
Layoff announcements with long runways could be a play to appeal to investors.
“It’s a way of saying to the investors, ‘We understand we’re going to have to change, and we’re going to try to get on this as soon as we can,’” says Peter Cappelli, management professor and director of the Center for Human Resources at the University of Pennsylvania’s Wharton School.
Internally, companies could have different motivations.
They may hope to save on severance costs by scaring some employees into leaving on their own rather than waiting to be let go. But it often doesn’t work that way: “You’re not going to scare the people who are not good performers because it’s hard for them to get a job someplace else,” Cappelli says. So employers risk losing their star employees, who can more easily find other jobs.
To try to combat this, employers may offer retention bonuses or other incentives to high performers or other employees in roles critical to the restructure, Rousseau says.
Across the board, the consequences for workers can be severe. “It’s a huge distraction for the workforce,” Rousseau says. “It makes people stressed, and you probably don’t get their best contributions because of that.”
Some companies could be trying to “scare employees into working hard” to try to keep their jobs, Cappelli said. “There are business leaders who think that’s the way you motivate people.” But that’s not an effective tactic, the professors say.
What this means for workers
Some workers, particularly lower performers, may opt to “hunker down and hide,” Cappelli says. Others may turn to “loud working,” angling for hypervisibility at work to try to avoid being laid off. But that won’t necessarily help workers keep their jobs, Cappelli and Rousseau say, and can instead fuel burnout, especially if workers are doing it for months or years before companies reveal the specifics of the job cuts.
For employees hearing of planned job cuts, it wouldn’t hurt to look out for opportunities elsewhere, the professors say, even though slow hiring in the U.S. right now can be discouraging.
It may be some consolation, they add, that employers’ plans are also likely to change over the long time frames. Cuts may not happen in the way the companies are planning now, Cappelli says: “They don’t have any idea what things are going to look like in three years.”
“There’s a lot of uncertainty,” Rousseau adds. “You don’t know how the environment will react, what the price of diesel will be, what the supply chains will be like.”
