Employees already have a handful of concerns over various uncertainties, but mounting fears around layoffs are adding another layer of stress that is reshaping how workers engage with their jobs and their employers.

During the current state of economic uncertainty and volatility, layoffs have been a common strategy as employers look to trim budgets. Starbucks, Meta, LinkedIn, the Walt Disney Company, and Walmart are among the several companies making headlines for recent downsizing.

For most employees — no matter what firm they are at — the underlying fear is that they might be next.

That’s both damaging to employees’ mental health and reverberate through behaviors and attitudes that impact the workplace.

“When employees feel layoffs could happen at any time, it creates a constant undercurrent of stress that can lead to distraction, disengagement, and hesitation to fully invest in their work,” said Mira Greenland, chief revenue officer at INTOO, a Los Angeles-based global career development and outplacement firm.

Recent research from INTOO and the Harris Poll found that more than 60% of employed Americans are experiencing layoff anxiety, up significantly from 2019.

That’s damaging and can cause big workplace implications, said Jasmine Escalera, career expert at career platform Zety in Miami Beach, Fla.

“Layoff anxiety is having a noticeable impact on how employees think about work, stability, and their future careers,” she said, adding that data has found many workers are prioritizing job security over compensation and are paying closer attention to how organizations communicate during periods of uncertainty. For instance, a recent survey by jobs site Monster recently found that salary is still important to recent grads, but two-thirds of soon-to-be graduates (67%) say they would accept a lower-paying job if it offered greater long-term career security.  

So what can, or should, organizations do to address layoff concerns? Experts say company and HR leaders have a role in helping reduce uncertainty and supporting employees through periods of instability.

“This is absolutely something employers should address,” Greenland said.

Benefits Support

Because employees’ mental health is being shaken by recurring uncertainty, including fears over job security, promoting available mental health benefits and support is an important strategy.

Most employers have mental health benefits, such as an employee assistance program (EAP), in place — SHRM data finds that 81% of employers offer an EAP — so now is a great time to communicate with employees about those benefits.

“It’s vital that employers provide access to timely, compassionate, culturally competent, and evidence-based support,” especially during times of crisis or uncertainty, said Dr. Jennifer Birdsall, chief clinical officer at ComPsych, a Chicago-based mental health service provider.

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