New data shows how companies manage layoffs—and employees experience them

Layoffs are nothing new. But how companies handle them—the planning, the communication, and the support for both those leaving and staying—has never mattered more than it does today.

That’s partly because the nature of layoffs is changing. AI-driven restructuring is making workforce reductions an increasingly recurring management decision. The implication is significant: Offboarding practices designed for occasional, emergency use are now being stress-tested by repeated, planned deployments, and many aren’t holding up.

Two additional forces are making the current status of layoffs even more consequential. First, employees are using the many available digital platforms to publicly share how those transitions felt. Second, the same AI disruption driving layoffs is also raising employee expectations for the support they should receive when layoffs occur.

This article examines the results of our recent Careerminds report, The Hidden Costs of Layoffs, created with OnePoll in late 2025. This study found that while many organizations are making genuine efforts to manage layoffs responsibly, crucial gaps remain, particularly in how those transitions are perceived by employees vs. the HR leaders conducting them.

Economists, lawmakers, business leaders, and workers agree on one point: The US economy is, at best, a cause for concern right now. Many factors are at play in raising the alarm, ranging from domestic policies to technological advancements to geopolitical instability. Key job market indicators, including layoffs, also suggest that an economic downturn is already a reality.

With layoffs becoming commonplace, HR leaders must ensure that employees, both departing and remaining, handle the transition as smoothly as possible. But before examining how companies are handling layoffs, it’s worth understanding what’s driving them. 

Artificial intelligence (AI), for example, isn’t an abstract future threat—it’s already reshaping the workforce decisions most HR leaders make today. When asked in our Careerminds survey how AI will impact existing job roles over the next three years, here is what HR leaders said.

Source: Careerminds report Workforce Resilience in the AI Era, November 2025

More strikingly, among HR leaders who anticipate layoffs in the next 12 months (57% of the total sample), nearly half (47%) cite AI adoption as the primary driver—ahead of market trends, changes in business strategy, or financial performance.

The skills most at risk, according to HR leaders, are data analysis (44%), data entry (42%), customer service (28%), and coding and programming (27%). The skills most likely to remain distinctly human—and most valuable heading into 2026—are AI and automation literacy (41%), critical thinking (36%), problem solving (29%), and adaptability (28%).

Moreover, nearly 7 in 10 HR leaders (68%) expect their organizations to increase investment in AI upskilling over the next 12 months. Only 5% of organizations currently offer no AI-related training. That’s a promising signal, but it doesn’t fully close the gap between aspiration and lived experience, especially when you consider the employees’ perception of AI training.

Whether or not you’re preparing for a layoff, understanding your staff’s skill gaps is crucial. To help you with this task, we created a free Guide to Workforce Planning that walks you through creating a more efficient, productive workforce structure and maximizing your talent potential. Click below to download our guide and start planning today.

For organizations that conducted layoffs in the past 12 months, the data suggests that most are approaching the process with more intentionality than the headlines might indicate. That intentionality shows up most clearly in pre-layoff planning. 

Most organizations are budgeting in advance, exploring alternatives first, building communication timelines, and involving legal and compliance teams. These are the structural foundations of a well-run transition, and the fact that over half of organizations consistently do them is a meaningful sign of progress.

STAGE:	ACTION TAKEN:	% OF ORGS:
Before	Budget for severance, outplacement, and related costs	55%
	Explore alternative options before proceeding	54%
	Develop a communication plan and announcement timeline	53%
	Review the plan with legal and compliance	50%
During	Provide employees with clear next steps and timing	64%
	Announce layoffs through company-wide communication	55%
	Train managers on how to deliver notifications	55%
	Hold follow-up sessions or Q&As for remaining employees	45%

Nearly 7 in 10 organizations (68%) delivered the news through in-person, one-on-one meetings, the gold standard for treating affected employees with dignity. Selection criteria most commonly relied on a multiple-criteria or weighted formula (57%), with employee performance (55%) and skillset (55%) cited most often as individual factors.

For employees who stayed, nearly 7 in 10 organizations (67%) provided communication about the company’s future direction, a step that’s critically important for retention and morale after a difficult transition. However, only 45% held follow-up sessions or Q&As with remaining employees, and fewer than half extended access to employee assistance after the event. 

Source: Careerminds report The Hidden Costs of Layoffs, November 2025

Organizations that do these things well are defining what a responsible transition looks like. Those skipping these steps may be completing the procedural requirements of a layoff without capturing the retention and trust benefits that good follow-through creates.

If you are preparing for a layoff and need support to communicate with your teams, click below to check out our free Careerminds Layoff Script. This easy-to-use resource provides five simple steps to inform employees of a layoff with empathy and professionalism.

Here’s where the picture gets more complicated. On the surface, employees are more resilient than the discourse around layoffs might suggest. In some cases, well-handled transitions actually strengthen the employment brand.

Source: Careerminds report The Hidden Costs of Layoffs, November 2025

However, a more complex story emerges among employees in organizations that actually conducted layoffs. When it comes to communication and empathy, HR and employee perceptions diverge significantly.

MEASURE:	HR LEADERS SAY:	EMPLOYEES SAY:
Leadership was empathetic in communications	83% agree	64% agree / 29% disagree
Employer communicated effectively about the layoffs	—	52% yes / 44% no
Layoffs were handled fairly overall	—	63% fair / 35% very unfair

These perception gaps are common in organizational research, where leaders consistently rate their own communication more positively than those receiving it. Even so, they still matter because employee perception shapes retention, morale, and employer reputation.

It’s also worth looking at what employees say that they needed but didn’t get, such as communication after the initial announcement. Employees frequently describe being well informed on the day of the layoff but left in the dark about what followed: timelines, next steps, changes to team structure, or updates on the company’s direction. While the announcement moment gets the most preparation, the weeks that follow it often get the least.

There’s also a notable gap in how HR leaders and employees characterize what being treated “fairly” looked like in practice. For HR, fair process often means consistent selection criteria, documented rationale, and legally sound procedures. 

For employees, fairness is more personal and emotional, including whether they felt seen, their tenure was acknowledged, and their departure felt like a considered decision or an administrative one. Closing that interpretation gap is one of the harder, more human challenges of layoff management.

How layoffs are handled affects both departing and remaining employees and shapes the stories people tell about the company afterward. And this story is increasingly being told publicly.

Source: Careerminds report The Hidden Costs of Layoffs, November 2025

For organizations that received feedback about how their layoffs were handled, the most common platforms were Glassdoor (44%) and Indeed (44%), followed by social media (38%) and Reddit (27%). 

This is why employer brand protection, more than a PR concern, is a red flag for talent attraction. Organizations that handle layoffs well retain stronger candidates. Those who handle them poorly may find future recruiting harder than the short-term savings warranted.

HR leaders know this. Over half (52%) conducted internal employee surveys after their layoffs to protect brand reputation. Additionally, 51% issued a leadership or public message, 46% monitored external reviews, and 41% provided post-layoff updates from executives. These are the right instincts, but they work best when paired with proactive communication and support, not as damage control after the fact.

One of the most striking findings across both surveys is the near-universal agreement on corporate responsibility. Both HR leaders and employees overwhelmingly agree that companies have an obligation to support workers displaced by AI-related layoffs.

Source: Careerminds report Workforce Resilience in the AI Era, November 2025

What coulddoes that responsibility look like in practice? Among HR leaders who agreed, 63% said that upskilling and reskilling should be offeredsupport impacted employees through upskilling and training., Mmore than half (59%) said the same of career frameworks, 47% mentioned redeployment services, and 36% cited the need for outplacement to help employees find new roles outside the organization.

Here’s the tension in the data: What HR leaders say that they would do and what employees actually receive after their departure are two different things. Outplacement support is only actively offered by 45% of organizations, meaning that a majority of laid-off employees leave without structured help in finding their next role. 

For workers whose roles were eliminated specifically due to AI-driven change, this gap is particularly acute. The disruption was not of their making, and the burden of navigating what comes next—including upskilling and reskilling—frequently falls on them alone.

The point of exit is where offboarding most commonly breaks down. The investments in communication plans, manager training, and severance packages are front-loaded in the announcement period. Once an employee’s access is revoked and final pay is processed, most organizations’ involvement ends. The weeks and months that follow, during which a displaced worker navigates the job market, are largely unsupported.

For AI-driven layoffs in particular, where workers may need to retrain, reposition, or pivot to other industries, the lack of support creates real costs: longer unemployment, greater financial stress, and the risk of a negative employee account of the layoff that could damage retention, recruitment, and brand reputation.

Our Careerminds report indicates that organizations are trying, but execution remains uneven as the stakes are rising. Organizations that are handling layoffs well tend to share certain key characteristics.

STAGE:	WHAT GOOD LOOKS LIKE:	WHY IT MATTERS:
Before	Explore alternatives, plan comms, budget for support	Reduces legal risk; signals genuine care
During	In-person 1:1 delivery; manager training; clear next steps	Dignity in delivery shapes long-term perception
Post (departing)	Severance + outplacement + career transition support	Reduces litigation; shortens unemployment
Post (remaining)	Future-direction communication; well-being support	Combats survivor syndrome; protects retention
Long-term	AI upskilling investment; clear career frameworks	Builds trust; prepares workforce for what’s next

The organizations that understand this are the ones that will retain their best people through difficult transitions, protect their employer brand, and build the trust that makes future workforce changes—and there will be more of them—easier to navigate.

Offboarding isn’t a compliance exercise. Done well, it’s one of the most powerful signals a company can send about what it values and who it’s actually for.

The data from our Careerminds research points to four clear areas of action for HR leaders managing or preparing for workforce transitions in an AI-driven environment. Let’s examine them in detail.

Since most HR leaders expect workforce reductions in the near future, organizations need carefully designed, well-documented offboarding processes before they take place. 

When these events are repeatable and consistent, with standardized communication frameworks, pre-approved support packages, trained managers, and clear escalation paths, all stakeholders will benefit, even when those situations are stressful and emotionally charged.

For impacted employees, the period after a layoff announcement is often when uncertainty peaks, questions accumulate, and trust is either reinforced or eroded. Effective offboarding communication should include updates on timelines and next steps, honest messaging about what the organization is doing and why, and dedicated channels for employees to ask questions. 

For surviving employees, this type of communication is just as important. Silence after a difficult event is almost always interpreted as bad news and can lead to decreased morale, retention, and productivity.

With nearly 7 in 10 employees willing to share their layoff experiences online, and 35% of employees already doing so, public discussion of these events is no longer a risk only in worst-case scenarios. 

Organizations should manage offboarding with the expectation that how employees are treated will be visible and searchable, influencing remaining staff and future hires. Beyond simply avoiding a PR problem, you must ensure that the layoff is well-handled enough that people can talk about it fairly without hurting your reputation.

Only 45% of organizations offer outplacement or career transition support to laid-off employees, according to our Careerminds survey. This means that the majority of displaced workers navigate what comes next on their own, raising the risk of long-term business costs, such as litigation, greater UI exposure, weaker employer brand, and reduced alumni goodwill. 

While severance ends the employment relationship, outplacement begins the next chapter—and whether that chapter starts well reflects directly on how the organization is remembered.

Our Careerminds report tells a story of genuine progress and persistent gaps. Organizations are planning more carefully, communicating more intentionally, and offering more support than ever, but there are clear discrepancies in how HR and employees look at these experiences.

What’s changing is the context in which all of this happens. Layoffs are more frequent, more visible, and more consequential for employer reputation. Companies treating offboarding as a strategic priority will be better positioned for every workforce transition that follows.

If you need help planning your layoff and career transition support, click below to connect with our experts. Careerminds offers a modern, results-first approach to outplacement, career coaching, and workforce planning that can set your organization up for success like no one else.