Feature
Research Report
The ROI of Employee Experience
The layoff announcements in October all sounded the same. Companies had strong earnings and profitable quarters. And in more good news for Wall Street, AI is supposedly making the workforce more efficient.
What’s a megacorp to do with all of this good news? Amazon cut 14,000 corporate jobs. UPS eliminated 48,000. Nestlé trimmed 16,000. The message to investors was clear: we found a way to do more with less. And by less, we mean fewer employees.
Here's the question nobody's asking on those earnings calls, though: What happens when you need those people back?
And you will need them back. Maybe not all of them, and maybe not right away. But when the market shifts, when projects expand beyond what a skeleton crew can handle, when a major client demands the kind of attention that requires institutional memory and relationship history, companies face a harsh reality. They’ll find that the majority of people they just cut won't return. And the ones they still employ are already taking calls from competitors.
The knowledge that got walked out the door can't be rehired so easily — and that could become a real problem.
Survivors Can’t Be Thrivers
Walk into the workplace a few weeks after a significant layoff announcement and you'll notice something off. Meetings run longer but accomplish less. People are careful about what they say and who they say it to. Slack channels that used to buzz with ideas have gone quiet, with backchannels via text going nonstop. The energy that used to drive projects forward has been replaced by a low hum of anxiety.
The best people rattled by layoffs find an exit ramp first. They're the ones with options, the ones competitors are calling. The rest stay but check out. The anger, anxiety and guilt that survivors feel intensifies over time. Doing more with less is pretty hard with a workforce like that.
Then there's what walks out the door with every departure.
The person who knew how to navigate that finicky client relationship is gone. So is the engineer who understood the legacy system everyone else was afraid to touch. The institutional memory about why certain processes work the way they do evaporates. Some combination of an overloaded existing employee, a new hire and probably some AI tries to fix the problem. Teams waste hours every week searching for information that AI hasn't captured yet.
People Who Are Laid Off Won't Come Back
In theory, these layoffs seem low-risk. Companies feel they can afford to take the productivity and knowledge gap hit. A deeper cut feels like a better bet in an employment market that seems soft for workers being displaced by AI.
The gap between what companies expect and what employees are willing to do is massive. In 2023, more than half of people who were laid off said they'd never return to that employer. A third would turn down an offer on the spot. The minority who might consider coming back would want significantly more money but even then, trust is gone.
Is that going to look much different in 2026? Unless you’re rooting for the bottom to fall out of the employment market, probably not.
You told them they were expendable. They believed you. Now they've moved on to companies that didn't discard them when algorithms looked cheaper. They've rebuilt their careers somewhere that doesn't make them feel like they're one quarterly earnings call away from unemployment.
Meanwhile, your reputation has taken a hit you probably didn't budget for. Four out of five organizations see their reputation damaged after layoffs. Seven out of 10 struggle to hire afterward. Candidates research how you treated people on the way out. They read the Glassdoor reviews. They talk to friends who worked there. Forty percent of Americans say their view of a company changes when they hear about layoffs.
Every hire just got more expensive and harder to close. And your competitors notice, too. They're calling your survivors right now, positioning themselves as the stable alternative.
A Different Approach For Better Layoffs
Layoffs happen. Markets shift, business models change and sometimes workforce reductions are necessary. And yes, today has the echoes of other significant changes that rocked markets and upended companies.
The biggest difference between then and now is the companies laying off the most significant number of employees today aren’t doing poorly enough to warrant the terrible messaging and lack of support for remaining employees.
With healthy profits and revenue at no risk of immediate disruption, companies have time to do this right and maintain a better employee experience. They are choosing to cut deep and brand discarded employees as efficiency draggers.
Organizations that handle handle workforce changes well invest heavily in the people who remain and ensure people who are shown the door are prepared for the next step in their careers. They're transparent about what's changing and why. They create clear pathways for career growth rather than leaving survivors to wonder if they're working hard enough to avoid the next cut. They systematically preserve institutional knowledge before people leave because they take care of the people leaving. They handle departures with enough dignity that employer brand stays intact.
They also build alternatives to the layoff-rehire cycle.
Internal mobility programs that redeploy talent rather than discard it. Reskilling initiatives that develop the capabilities you'll need next year. Workforce planning that accounts for the true cost of losing people, not just the savings from cutting their salaries.
The companies winning in 2026 won't be the ones that cut fastest in 2025. They'll be the ones that kept their best people, preserved what they knew and maintained the trust that makes execution possible when opportunity returns.
Webinar
Mar
26
Do Learning Programs Really Work? How to Turn Education Into Engagement In Healthcare
See how leaders are using learning programs to build trust with healthcare professionals and create measurable engagement.
Register
Webinar
On demand
Fuel Your Front Line: Workforce Trends Shaping 2026
Get expert insight into the tools and tactics top frontline teams will need in 2026.
Watch Now
Webinar
On demand
Fix the Disconnect Between Projects and Profit
Your margins are hiding in disconnected data. Let's find them.
Watch Now
Webinar
On demand
AI in Customer Service: Faster Resolutions, Happier Customers
Don’t let rising demand burn out your team. See how to build a smarter, more resilient support org.
Watch Now
The Bill Comes Due … Eventually
When Amazon needs to rehire, they will find 14,000 new employees. Large companies with deep pockets usually do.
But institutional knowledge doesn't come back with new hires. The majority of people you laid off won't give you another chance. Survivors who stopped caring won't suddenly re-engage because you posted new job openings.
The efficiency gains from AI may be real or just around the proverbial corner. The question is whether you're accounting for everything they cost. Because the bill shows up later, in the projects that stall for lack of knowledge, the hires you can't close, the talent that won't return and the survivors who stopped caring.
Count all the costs before you decide what to cut. The savings you see today might be the capacity you can't rebuild tomorrow.
Editor's Note: For more advice on how to humanely conduct layoffs:
- The Hidden Cost of Losing Employees — Losing employees is an inevitable part of business. But organizations that fail to plan for the full impact of these departures will suffer.
- Have You Considered These Alternatives to Layoffs? — What can businesses do instead of layoffs? These experts in HR, compensation and business strategy have a few ideas.
- How to Keep Teams on Track After Layoffs — Layoffs often hurt more than they help. Learn how smart leaders sustain team morale, productivity, and retention after workforce cuts.