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When a layoff is announced, most of the internal energy understandably goes toward legal review, severance calculations, and notification logistics. These are urgent, high-stakes tasks, and getting them right matters. But there’s a longer, slower consequence of workforce reductions that organizations are less practiced at managing: the reputational aftershock.
Beyond those being let go, how a company handles a layoff affects remaining employees’ morale, future candidates assessing whether to apply, and public perception of the organization as a place worth working at. Data shows that, as employee experiences become increasingly visible, searchable, and shareable, employer brand is built—or damaged—in these critical, emotion-laden moments.
Our recent Careerminds report, The Hidden Costs of Layoffs, offers a detailed picture of what those moments look like in practice and why the gap between how organizations think they’re handling layoffs and how employees experience them is a risk HR leaders can no longer afford to ignore.
About the research:
Careerminds commissioned research conducted by OnePoll in late 2025 that surveyed 500 US HR leaders and 500 US employees at mid- to large-scale companies. Data was segmented by age, gender, region, sector, company size, and layoff experience.
The reputational risk behind the perception gap
HR leaders surveyed for our Careerminds report largely believe that their organizations handled layoff communications with empathy and solid preparation. Most organizations budgeted for severance, explored alternatives, developed a communication plan, and reviewed the process with legal and compliance.
However, employees who lived through those same layoffs tell a meaningfully different story. A significant portion found the communications ineffective, and nearly one third found them entirely lacking in empathy.
83%
of HR leaders rate their leadership as empathetic in layoff communications.
64%
of employees agree that communication was empathetic.
44%
of employees describe layoff communication as ineffective.
29%
of employees say that communication was not empathetic at all.
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
This perception gap is one of the more consequential findings from our Careerminds research. Employer brand is stress-tested in moments of organizational difficulty, and a layoff is one of the most visible.
When the employee experience falls short of the standard leadership aims to set, the organization has a serious credibility issue. This shapes how current employees talk about their workplace, how former employees describe it on review platforms, and how prospective candidates decide whether the organization is worth trusting.
The picture of fairness follows a similar pattern. A majority of employees felt that the process was handled fairly overall. However, this is less encouraging when you account for the substantial minority—over one third of surveyed workers—who felt the complete opposite. Such a proportion of negative opinions often makes itself heard, having a considerable impact on the employer brand.
63%
of employees think that their organizations handled layoffs fairly overall.
34%
think that their companies handled workforce reductions very fairly.
35%
think that their employers handled layoffs
very unfairly.
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
When employees disagree with leadership and feel that the layoff process was fundamentally unjust, the organization carries that forward in every Glassdoor review, LinkedIn post, and word-of-mouth conversation. Their impact on the employer brand, which we will explore in more detail next, cannot be understated.
Statistical insight:
When asked how well their employers handled layoffs in the past 12 months, respondents to our Careerminds study gave an average score of 3.68 out of 5. This rating is only moderately positive, indicating that there is plenty of room for improvement to mitigate reputational risks.
To deliver fair and efficient layoff events, HR teams must approach their communication with full empathy. If you need help achieving this in your workforce reduction, click below to download our free Layoff Script, with five easy steps to inform your teams with the respect and professionalism they deserve.
Employees are watching—and talking
The reputational consequence of a layoff extends well beyond the people directly affected. It ripples through the remaining employees, who form views they are increasingly willing to share publicly on review platforms, on social media, and through word of mouth.
| The public face of layoffs | |
| Employees who would share negative layoff experiences publicly | 69% |
| Employees who have already shared their experiences publicly | 35% |
| Organizations where post-layoff feedback appeared on Glassdoor | 44% |
| Organizations where post-layoff feedback appeared on Indeed | 44% |
| Organizations where post-layoff feedback appeared on social media | 38% |
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
From the HR side, the data confirms that these concerns are landing in real, permanent places. Glassdoor and Indeed are the primary destinations, but the conversation spills across social media and Reddit as well. This is the reputational landscape HR leaders are navigating: a distributed, publicly indexed, and essentially permanent record of how employees were treated.
For talent acquisition teams, the downstream consequences are direct. Candidates research organizations before applying, including reading these reviews to form a considered opinion. A company that handles a layoff poorly may find itself paying the cost of recruiting difficulty—not because of anything it does wrong going forward, but because that record exists.
Statistical insight:
Data from Glassdoor shows that companies with the strongest pre-layoff reputations see the steepest rating drops in the six months following a layoff, losing 0.22 points in current employee ratings. At the same time, the share of reviews from former employees rises from 26% to 33%, further pushing scores down.
Glassdoor also states that 83% of job seekers check company reviews before applying, and one in three has turned down a job offer because of negative reviews—a clear indicator of the reputational risk that follows a poorly managed layoff.
What remaining employees are really wondering
Apart from impacting departing employees, a layoff resets the psychological contract for those who stay. Remaining employees watch what happens and draw conclusions about what the organization actually values, how leadership behaves under pressure, and what their own future looks like.
Our Careerminds report captures this dynamic clearly. Most remaining employees say that they intend to stay, which is an encouraging finding. However, a meaningful minority say the opposite, and surveyed HR leaders report that voluntary turnover increases more often than not in the wake of a layoff.
76%
of employees are likely to stay with their employer after witnessing layoffs.
21%
of employees are unlikely to stay with their employer after witnessing layoffs.
40%
of HR leaders
report that layoffs increased voluntary turnover.
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
This is the problem with a reputational aftershock. The employees most likely to leave after a poorly managed layoff are often the ones with the strongest options—high performers, senior contributors, and people with in-demand skills who read the signals and act.
When those people walk out the door, they take institutional knowledge with them, and often share their candid assessments on the review platforms where your next candidates will read them. Retention, corporate reputation, and the ability to attract new talent are far from separate issues. They are simply different perspectives on the same core problem.
How organizations are handling layoffs right now
The Hidden Costs of Layoffs report helps us understand where reputational risk is concentrated, exposing what organizations are actually doing before, during, and after workforce reductions.
| Actions organizations took in their layoffs | |
| Budgeted for severance and related costs before layoffs | 55% |
| Explored alternatives before proceeding | 54% |
| Developed a communication plan and timeline | 53% |
| Provided employees with clear next steps during layoffs | 64% |
| Trained managers to deliver notifications | 55% |
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
On the preparatory side, the picture is encouraging. Most organizations are doing the foundational work—budgeting appropriately, exploring alternatives, building a communication plan, and involving legal and compliance before proceeding. During the layoff itself, the majority are providing clarity to employees and equipping managers to deliver difficult news.
These are responsible baseline practices. However, the picture becomes less consistent post-layoff. The data also reveals meaningful gaps, and the absence of clarity and support is precisely what employees tend to remember.
Communicating the company’s future direction to remaining employees is one of the most urgent tasks for an organization after a workforce reduction. Yet, a significant portion fails to do it. Without this forward-looking communication, anxiety fills the vacuum, creating the precondition for both disengagement and attrition.
| Steps organizations took to protect their reputation | |
| Conducted an internal employee survey or pulse check | 52% |
| Issued a leadership or public message addressing the layoffs | 51% |
| Monitored external reviews (e.g., Glassdoor, social media) | 46% |
| Provided post-layoff updates from executives | 41% |
Source: Careerminds report The Hidden Costs of Layoffs, November 2025
The organizations actively taking steps to protect their reputation after a layoff (e.g., surveying employees, issuing leadership messages, monitoring external reviews) are treating employer brand as something worth managing proactively, rather than remaining reactive in the hope that it stays intact.
The AI factor adds pressure
The reputational stakes around layoffs are rising for a specific reason: An increasing share of workforce reductions is being driven by AI adoption, and employees know it.
The data clearly shows this trajectory. A majority of surveyed HR leaders anticipate conducting layoffs in the next 12 months. Among those, AI adoption ranks as the leading driver—ahead of market trends, changing business strategy, and financial performance.
HR leaders also broadly expect AI to require significant workforce adaptation over the next three years, whether through role replacement, automation of responsibilities, or learning entirely new tools.
| The impact of AI on layoffs | |
| HR leaders anticipating layoffs in the next 12 months | 57% |
| Of those, HR leaders citing increased AI use as the primary driver | 47% |
| Employees saying that companies must upskill those impacted by AI-related layoffs | 80% |
| HR leaders saying that companies must upskill those impacted by AI-related layoffs | 88% |
| HR leaders who think that AI will require employees to learn new skills in the next 3 years | 64% |
Source: Careerminds report Workforce Resilience in the AI Era, November 2025
The consequential aspect of AI transformation on the employer brand can be measured in terms of values. Employees and HR leaders alike overwhelmingly agree that organizations have a responsibility to support workers impacted by AI-related layoffs through upskilling and transition support. However, when an organization fails to act on that shared expectation, the gap between stated values and observed behavior is exactly what ends up in Glassdoor reviews.
The good news is that most organizations understand what good support looks like. Those that actually deliver it through upskilling programs, clear career frameworks, redeployment efforts, and outplacement support aren’t just doing right by departing employees. They’re sending a signal to those remaining that they will be treated as people, not as costs to be managed.
If you need help providing your staff with clarity and structure on the skills they need to develop and the career paths they can pursue, click below to start building your career framework. With our AI-powered features, your HR teams will save weeks of work and give your talent a customized career path that keeps them engaged and growing.
How to shape your employer brand during difficult moments
Employer brand is not built solely through carefully crafted careers pages and thoughtful culture messaging. As we’ve seen so far, employees—both remaining and departing—know the difference between how an organization presents itself and how it actually behaves, especially when things get hard. The same goes for the general public and job market, given the prevalence of employer rating platforms and comments on social media.
For all employer brands, layoffs are a test. Employees watch whether the people being let go are treated with dignity, whether communication is honest and timely, whether managers are equipped to handle difficult conversations, and whether leadership remains accountable after the announcement and follows through on promised support.
Our Careerminds report points to four principles that consistently help organizations pass that test.
1. Communicate early, clearly, and repeatedly
Transparency is what surveyed employees say that they need most, but believe that they’re least likely to get. Your layoff communication plan shouldn’t end with the event announcement. Remaining employees need ongoing, relevant information about what the layoff means for your organization’s direction, their own roles, and what support is available.
2. Train managers before the moment arrives
Notifications delivered poorly—whether due to vague messaging, inconsistent handling, or managerial discomfort—leave lasting impressions. Organizations that invest in early manager preparation are far better positioned than those that improvise under pressure. Managers are key frontline stakeholders, so ensure that they are fully prepared.
3. Support doesn’t end when departing employees exit
Post-layoff support is a core driver of whether your workforce stabilizes or quietly unravels. Remaining employees deserve career development plans, mental health resources, leadership visibility, and forward-looking communication. For departing employees, consider outplacement services until placement—expert career transition support until they find a new, meaningful role.
4. Monitor what’s being said and respond thoughtfully
Platforms like Glassdoor and Indeed are where the post-layoff conversation is happening. Organizations that actively monitor reviews and respond professionally demonstrate that they take employee experience seriously—and candidates will notice, increasing the attraction and retention of top talent.
What the data ultimately tells HR
Our Careerminds Hidden Costs of Layoffs report paints a picture that should be both sobering and actionable. Layoffs are happening at a significant scale, with nearly 6 in 10 HR leaders anticipating layoffs within the next 12 months. And the pressure driving them, particularly from AI-related transformation, is unlikely to ease up.
How organizations manage these transitions is not a peripheral HR concern. Those that consistently handle layoffs with transparency, preparation, and genuine care for the people involved are building something that cannot be bought: a reputation for treating employees well even when it’s difficult. That reputation attracts stronger candidates, retains valuable employees, and provides resilience when the next difficult moment arrives.
Those that don’t manage layoffs well are leaving a record—on Glassdoor, LinkedIn, and conversations between hiring managers and candidates—that compounds over time. Layoffs are brand moments. The organizations that treat them as such will emerge from workforce reductions with their culture and credibility intact.
As we’ve seen throughout our research, one central element that helps preserve employer brand during layoffs is outplacement services. If you’re considering offering outplacement to laid-off employees, click below to speak with our Careerminds experts and learn how our career coaches help individuals find a fulfilling new chapter in their careers—combining a modern, tech-driven approach with a results-oriented mindset and the human touch that makes the difference.
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