As massive layoffs continue in the tech industry, and questions of an impending recession remain, many employees fear what lies ahead for them in 2023.
In December, ResumeBuilder.com surveyed 1,000 business leaders to understand how employment in their organizations has fared in 2022 and the outlook for 2023.
- 61% of business leaders say their organizations will likely have layoffs in 2023
- 57% of business leaders who say layoffs are likely estimate 30% or more of their workforce will be laid off in 2023
- 70% of companies are likely to implement a hiring freeze in 2023
- 34% say their organizations are reducing or eliminating holiday gifts or bonuses this year; 27% reduced salaries of current employees
- 79% of business leaders say they’re likely to fire ‘quiet quitters’
- 74% of business leaders agree it will be easier to fire poor performers next year due employees losing bargaining power
6 in 10 companies will likely lay off employees in 2023
When it comes to 2023, 61% of business leaders say their organizations will likely have layoffs in the new year.
Of those 61% who say their company will likely lay off employees next year, 57% estimate that 30% or more of the workforce will be laid off.
Our survey had 82 respondents in the software industry. Notably, a higher percentage (84%) said layoffs were likely, and 65% estimated that 30% or more of the company’s workforce would be let go.
Our survey showed layoffs are more likely among larger companies. Seventy four percent of business leaders in companies with over 500 employees say there will likely be layoffs in their organization, compared to 51% of business leaders in companies with 500 or less employees.
7 in 10 companies are likely to implement a hiring freeze in 2023
Currently, 52% of companies have a hiring freeze in certain departments, and 19% have a company wide hiring freeze. Only 27% say their organization has no hiring freeze at the moment.
When it comes to 2023, 70% of companies say they’re ‘very likely’ (38%) or ‘likely’ (31%) to implement a hiring freeze.
When looking at companies with over 500 employees, 88% say they’re likely to implement a hiring freeze, compared to 56% of organizations with less than 500 employees.
However, Stacie Haller, executive recruiter and career counselor, notes that it’s still largely a candidate driven market.
“Recent layoffs have largely been driven by the tech industry, which is rightsizing after over-hiring when the onset of the pandemic increased business. But some other sectors are experiencing hiring freezes,” says Haller.
“With unknown variables in the workforce regarding not only internal workforce issues, but also the changing culture around working today, hiring freezes may be a safer policy for companies to implement before layoffs are needed. With the talk of a recession, this may be what we will see in the coming months.”
1 in 4 of companies have reduced current employees’ salaries
The majority of business leaders in our survey say their organization has taken compensation-related actions in order to reduce costs. The most common action, taken by 34% of organizations, was reducing or eliminating signing bonuses.
Companies also say they are reducing or eliminating holiday gifts or bonuses this year (34%), have reduced or eliminated employee benefits (30%), and reduced current employees’ salaries (27%). Only 28% of companies say they didn’t take any of the aforementioned actions.
“It’s still largely a candidate driven market, and there are still over two openings for every candidate,” says Haller.
“In today’s employment world, everyone should always be ready for their next opportunity. Resumes should always be up-to-date and workers should remain active in their networks and on LinkedIn. In this market, those who find themselves with reduced salaries may find an increase in salary with a new position elsewhere. If a layoff is announced, workers should be prepared to negotiate severance, outplacement, and other benefits they may be able to attain.”
8 in 10 are likely to fire ‘quiet quitters’
Currently, 79% of business owners say they’re ‘very likely’ (36%) or ‘likely’ (43%) to fire those who they identify as ‘quiet quitters,’ meaning they only do the bare minimum.
Additionally, when asked if they agree or disagree with the statement, ”In 2023 it will be easier to fire poor performers because workers will have less bargaining power,” 41% of business owners answered they ‘somewhat agree’ and 32% ‘strongly agree.’
When it comes to considering which employees will be cut during layoffs, 76% say they tend to evaluate based on performance and 23% use’ last in, first out.’
“For the most part, top producers do not get laid off. So being at the top of your game at work is the best way to evade coming layoffs,” says Haller.
All data found within this report derives from a survey commissioned by ResumeBuilder.com and conducted online by survey platform Pollfish on December 1, 2022. In total, 1,000 U.S. business leaders were surveyed.
Appropriate respondents were found via Pollfish’s screening tools. To take the survey respondents to be 25 or older, work for an organization with at least two employees, earn at least $50,000, and currently occupy one of the following organizational roles: c-level executive, owner or partner, president/CEO/chairperson, or senior management.
Pollfish uses Random Device Engagement (RDE), which is both random and organic. This survey uses a convenience sampling method. You can learn more about how Pollfish’s methodology works here.