With over 1.1 million layoffs in 2025, HR leaders now face what experts call a “Trust Recession.” The biggest casualty of this wave of mass job cuts in 2025 is employee trust. For many workers, the ground beneath feels permanently shaky. As for HR leaders, no metric is harder to rebuild than organizational trust.

Historically, layoffs were treated as a strategic business decision. Today, employees internalize them as personal signals. Am I valued? Am I next? Does my company care about my future?

Each round of company layoffs in 2025 chips away at the core pillars of employee trust until even high performers begin doubting their place. This uncertainty has led to a decline in employee engagement.

With organizational trust at its lowest point in years, companies and HR leaders must now confront a grim reality. Job security may be gone; however, emotional security must now replace it.

Layoffs in 2025 and declining engagement

When employee morale drops, so does productivity. When employee engagement declines, companies lose creativity, collaboration and initiative. These are qualities that no algorithm or workplace automation can replace.

For the longest time, HR leaders have focused on benefits, compensation and culture-building in the workplace. But what seems to the new currency is transparency.

Transparent communication in the workplace cannot be seen as an optional approach. It is the only path to restoring declining employee trust.

In workplaces where employees fear unexpected announcements, everyday routines feel exhausting. A simple “all-hands meeting” notification can spike anxiety. A vague email can spark speculation around impending layoffs. This is what the Trust Recession looks like in 2025; thanks to the rise in layoffs in 2025. We’re surrounded by a workforce that is overthinking, underperforming and emotionally fatigued by speculation.

How HR can restore trust in 2025?

The solution to Trust Recession lies in bringing truer transparency, and there are several ways to deliver on this promise.

Overcommunicate before employees overthink:

Honest HR communication gives employees something stable to rely on. When leadership proactively shares updates, strategy shifts, or market realities, it strengthens both organizational trust and employee trust.

Name the uncertainty instead of hiding it

Employees already know the company is navigating a difficult period. When HR acknowledges challenges openly, workplace morale improves, even in the middle of layoffs.

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