Nearly Two-Thirds of HR Leaders Anticipate Layoffs by 2027
Companies are shifting toward career transition services while reducing severance package generosity for employees.
1Widespread Layoff Expectations
A survey of 600 U.S. leaders reveals that 72% of business executives and 80% of CEOs anticipate layoffs within the next 12 months. These projections reflect a broader trend where workforce reductions are no longer tied solely to periodic budget cycles, but are becoming a constant consideration for modern corporate leadership teams.
2Alternatives to Involuntary Cuts
Nearly all surveyed organizations, approximately 99%, actively explore alternatives to involuntary staff reductions to manage payroll. Common strategies include retirement incentives used by 42% of firms, voluntary departure programs at 41%, and redeployment or temporary leave options at 38%. These methods aim to mitigate the human impact of necessary corporate restructuring efforts.
3The Role of AI Integration
LHH President John Morgan highlights that workforce reductions are increasingly linked to how organizations rethink operations due to AI investments. As companies learn which workflows are effective, they are forced to make difficult decisions regarding their human capital. This ongoing transformation necessitates a more strategic approach to long-term workforce planning and management.
4Expanded Career Transition Services
Access to career transition services has grown significantly for both exempt and nonexempt employees. Currently, 85% of exempt staff receive these resources, up from 61% in 2024. Similarly, 79% of nonexempt employees now have access, a notable increase from 58% in 2024, often including one-on-one coaching and various specialized online career tools.
5Shift in Decision-Making Authority
The influence of HR departments in outplacement decisions has declined, dropping from 58% in 2024 to just 30% today. Conversely, CFOs now lead these decisions in 18% of companies, rising from 6%, while procurement departments manage them in 13% of cases, up from 2%. This indicates a shift toward financial-centric workforce management.
6Sector-Specific Vulnerability Trends
Technology jobs currently face the highest risk of layoffs, with sector-specific cuts increasing by 67% year over year as of July. This trend places the tech industry ahead of the finance and government sectors in terms of workforce volatility. These figures underscore the intense pressure on tech firms to optimize their operational costs.
7Integrating Reskilling and Strategy
Morgan emphasizes that leaders must integrate reskilling, redeployment, and career transition into a single, cohesive strategy. As pressure to deliver financial results mounts, workforce planning can no longer be deferred. Organizations that embed these elements into their daily operations are better positioned to navigate the complexities of a rapidly changing labor market.
8Future Outlook for Workforce
The transition toward more comprehensive support services suggests a shift in how companies handle departures. While layoffs remain a primary concern for 2027, the focus is moving toward managing the transition process more effectively. Leaders must balance the immediate need for cost reduction with the long-term necessity of maintaining organizational reputation and stability.
Original article: HR Dive — Nearly Two-Thirds of HR Leaders Anticipate Layoffs by 2027