As suspicion of a recession in 2024 mounts, workers fear their job security.
To find out how many companies believe layoffs are likely next year, in December, ResumeBuilder.com surveyed 906 business leaders at organizations with over 10 employees.
Key findings:
- 38% of companies say they are likely to have layoffs in 2024
- 52% are likely to implement a hiring freeze in 2024
- Half say anticipation of a recession is a reason for potential layoffs
- 4 in 10 say layoffs are due to replacing workers with artificial intelligence (AI)
- 3 in 10 companies reducing or eliminating holiday bonuses this year
4 in 10 Companies Expect to Have Layoffs in 2024
According to our survey, 65% of business leaders say they’ve had layoffs so far in 2023. Of that group, 25% say they’ve laid off 30% or more of their workforce.
For 2024, 38% of business leaders surveyed say they think layoffs are likely at their organization. Of this group, 22% say 30% or more of the workforce may be let go. Additionally, 52% say their company is likely to implement a hiring freeze in 2024.
Business leaders at midsize companies (101 to 1,000 employees) are most likely to believe they will have layoffs (42%). In small companies with 100 or fewer employees, 28% of business leaders believe their organizations will have layoffs. At large companies (over 1,000 employees), 39% believe they will have layoffs.
Our survey also found that some industries are more likely to be predicting layoffs.
Business leaders from industries we surveyed with at least 50 respondents say layoffs at likely the following rates:
- Construction (66%)
- Software (65%)
- Information (44%)
- Retail (44%)
- Finance and insurance (38%)
- Education (34%)
- Health care and social assistance (28%)
A performance-based approach to layoffs is what 62% of companies say they take, while 17% say they use ‘last in, first out.’
“Especially for small businesses, there are some tried and true methods in regard to avoiding layoffs,” says Alex Mastin, CEO and founder of Home Grounds. “It really does begin with thinking outside the box and generating new ideas for revenue, marketing, and reducing overhead costs. For businesses of any size, it may also be helpful to expand job roles for single employees to reduce staffing amounts (and additional salaries). Workers can also make themselves an asset to their company through a willingness to train on multiple functions.”
4 in 10 say cause of layoffs is AI replacing workers
According to business leaders, layoffs are likely next year due to a need to reduce costs (69%), anticipation of upcoming recession (51%), desire to increase profits (42%), and replacing workers with AI (39%).
“If most companies are doing performance-based layoffs, now is not the time to be complacent or checked out of your position,” says Resume Builder’s resume and career strategist Julia Toothacre. “Make sure you are keeping track of your wins and impact in your position and share information with your manager regularly.”
“Also, because AI continues to be a reason for layoffs, take time to learn how to leverage AI in your position and which AI programs might impact your work the most. Learn about them and become the ‘go-to’ person. You want to be the employee your manager can’t imagine going on without.”
Holiday Bonuses Affected at 3 in 10 Companies
To reduce costs, business leaders say their company took the following actions this year:
- Reduced or eliminated signing bonuses (32%)
- Lowered or discontinued holiday gifts or bonuses (30%)
- Reduced or suspended employee benefits (17%)
- Decreased current employees’ salaries (12%)
Of those who say they have reduced employee salaries, the plurality (49%) say middle management has taken a compensation hit. Additionally, so have entry-level employees (47%), intermediate-level employees (45%), first-level managers (43%), and senior managers (36%). C-suite executives were the least likely group to have their compensation affected (35%).
“The only time reducing pay is acceptable is when you have executives making significantly more than market value and significantly more than the majority of the employees who execute the day-to-day business. If the CEO and executive team aren’t the first to take a pay cut, they are sending a message to the whole company. While executives have a part to play, if you prioritize saving their salary over the people who are actually doing the work and interfacing with clients, you’re going to lose in the end,” says Toothacre.
Methodology
This survey was commissioned by ResumeBuilder.com and conducted online by the survey platform Pollfish. It was launched on December 7, 2023, and 906 respondents completed the full survey.
To qualify for the survey, all participants had to work at a company with at least 11 employees and have one of the following job titles: C-level executive, director, president/CEO/chairperson, owner or partner, senior manager, or HR manager. Respondents also had to have a household income of at least $50,000.
To avoid bias, Pollfish employs Random Device Engagement (RDE) to ensure both random and organic surveying. Learn more about Pollfish’s survey methodology or contact [email protected] for more information.
