Job Cuts Hit HR Tech Companies. Here’s What’s Next for the Job Market
A concerning trend is unfolding in the corporate world as nearly half of U.S. companies anticipate layoffs in 2025. This shift is driven by economic uncertainty, the rise of AI automation, and policy changes under the Trump administration.
A recent survey by ResumeTemplates, a leading platform for professional resume templates, reveals that 45% of U.S. managers expect layoffs this year. Of these, 11% are certain about workforce reductions, while 34% consider them probable.
The layoffs are expected to be modest, with 28% of companies planning to cut fewer than 5% of their workforce and 44% anticipating reductions of 5% to 10%. These numbers signal a cautious approach amid economic challenges.
Why Are Companies Cutting Jobs?
The reasons for these layoffs are multifaceted. Economic struggles and industry-specific challenges are primary factors. However, automation and artificial intelligence are playing a significant role, with 32% of companies citing AI adoption as a reason for expected layoffs.
Additionally, 24% of companies believe that policies under the Trump administration could impact their layoff plans, reflecting broader economic and regulatory uncertainty.
Cost-Cutting Measures Beyond Layoffs
Beyond layoffs, companies are implementing other cost-cutting strategies. A hiring freeze is in place for 31% of companies, while another 13% plan to impose one this year.
Other common measures include reducing or cutting bonuses (32%), downsizing office space (25%), and cutting employee benefits (17%). Salary reductions are also on the horizon, with 12% of companies planning to lower salaries for all employees or specifically for low-performing staff.
The Hidden Costs of Layoffs
While layoffs may offer short-term financial relief, they come with significant long-term consequences. Research shows that layoffs can reduce employee engagement, morale, and loyalty for over a year, leading to higher turnover rates.
Previous studies highlight the high costs of layoffs, including increased mental health issues, such as depression and substance abuse, among displaced workers. Additionally, layoffs can lead to violent behavior, including domestic and child abuse.
HR and Diversity Teams Bear the Brunt
HR and corporate diversity teams are disproportionately affected by the recent tech layoffs. Experts warn that these cuts are short-sighted, as companies that reduce recruitment or diversity, equity, and inclusion (DE&I) efforts will struggle to recover when the economy stabilizes.
Major companies like Stripe, Meta, and Amazon have noted that layoffs will disproportionately impact recruiting, as they do not plan to hire significantly in the coming year.
Job Cuts Hit HR Tech Companies. Here’s What’s Next for the Job Market
A concerning trend is unfolding in the corporate world as nearly half of U.S. companies anticipate layoffs in 2025. This shift is driven by economic uncertainty, the rise of AI automation, and policy changes under the Trump administration.
A recent survey by ResumeTemplates, a leading platform for professional resume templates, reveals that 45% of U.S. managers expect layoffs this year. Of these, 11% are certain about workforce reductions, while 34% consider them probable.
The layoffs are expected to be modest, with 28% of companies planning to cut fewer than 5% of their workforce and 44% anticipating reductions of 5% to 10%. These numbers signal a cautious approach amid economic challenges.
Why Are Companies Cutting Jobs?
The reasons for these layoffs are multifaceted. Economic struggles and industry-specific challenges are primary factors. However, automation and artificial intelligence are playing a significant role, with 32% of companies citing AI adoption as a reason for expected layoffs.
Additionally, 24% of companies believe that policies under the Trump administration could impact their layoff plans, reflecting broader economic and regulatory uncertainty.
Cost-Cutting Measures Beyond Layoffs
Beyond layoffs, companies are implementing other cost-cutting strategies. A hiring freeze is in place for 31% of companies, while another 13% plan to impose one this year.
Other common measures include reducing or cutting bonuses (32%), downsizing office space (25%), and cutting employee benefits (17%). Salary reductions are also on the horizon, with 12% of companies planning to lower salaries for all employees or specifically for low-performing staff.
The Hidden Costs of Layoffs
While layoffs may offer short-term financial relief, they come with significant long-term consequences. Research shows that layoffs can reduce employee engagement, morale, and loyalty for over a year, leading to higher turnover rates.
Previous studies highlight the high costs of layoffs, including increased mental health issues, such as depression and substance abuse, among displaced workers. Additionally, layoffs can lead to violent behavior, including domestic and child abuse.
HR and Diversity Teams Bear the Brunt
HR and corporate diversity teams are disproportionately affected by the recent tech layoffs. Experts warn that these cuts are short-sighted, as companies that reduce recruitment or diversity, equity, and inclusion (DE&I) efforts will struggle to recover when the economy stabilizes.
Major companies like Stripe, Meta, and Amazon have noted that layoffs will disproportionately impact recruiting, as they do not plan to hire significantly in the coming year.
Conclusion
The anticipated layoffs in 2025, affecting nearly half of U.S. companies, underscore the challenges posed by economic uncertainty, AI automation, and policy changes. While the reductions are expected to be modest, the impact on employee morale and company recovery could be significant. Beyond layoffs, companies are adopting various cost-cutting measures, but these may come with long-term consequences. The disproportionate effect on HR and diversity teams raises concerns about future recruitment and DE&I efforts. As companies navigate this landscape, balancing short-term financial needs with long-term resilience is crucial for sustainable growth.
Frequently Asked Questions
- Why are companies expecting layoffs in 2025?Layoffs are anticipated due to economic uncertainty, the rise of AI automation, and policy changes under the Trump administration.
- Which industries are most affected by these layoffs?Primarily the tech and HR sectors, with companies like Stripe, Meta, and Amazon impacted.
- What percentage of companies expect layoffs?45% of U.S. companies expect layoffs, with 11% certain and 34% considering them probable.
- How severe are the expected layoffs?28% plan to cut less than 5%, and 44% anticipate reductions of 5% to 10%.
- What are the hidden costs of layoffs?Layoffs can reduce employee engagement, increase mental health issues, and lead to violent behavior, impacting company morale and recovery.
- How are HR and diversity teams affected?These teams are disproportionately impacted, potentially hindering recruitment and DE&I efforts, making recovery challenging.
- Do Trump administration policies influence layoff plans?Yes, 24% of companies believe these policies impact their layoff decisions.
- Will this layoff trend continue beyond 2025?While economic conditions may improve, companies are cautious, and the trend’s continuation depends on future economic stability.