With current macroeconomic conditions pointing toward signs of an impending recession next year, many U.S. companies anticipate making considerable layoffs in 2023, according to a survey commissioned by ResumeBuilder.com.
Of the 1,000 business leaders surveyed in the early December poll, one-third estimated they would lay off 30% or more of their workforce next year.
According to Stacie Haller, executive recruiter and career counselor at ResumeBuilder.com, the survey “serves as an indicator for the various organizational trends and thinking heading into next year.” In addition, the survey “acts as a snapshot of how they are going to mitigate the coming effects of an uncertain economy,” Haller told The Dallas Express.
The findings by ResumeBuilder.com suggest a waning U.S. job market and a loss of confidence in hiring managers heading into the following year.
The report showed that layoffs are much more likely among larger companies – those with more than 500 employees (74%), compared to smaller ones – those with 500 or fewer (51%). Of the survey respondents, 61% of business leaders said their organizations will likely have layoffs in 2023, 57% of whom estimate 30% or more of their workforce will be laid off.
The bulk of industry layoffs is expected in the software industry, of which 84% of respondents said that “layoffs were likely.”
“Our survey found that the tech and software sectors were overweight in terms of anticipated layoffs,” Haller told The Dallas Express. “Now, with increased uncertainty heading into 2023, many of these organizations are having to right-size following the huge hiring spree that took place pre-COVID. However, the preponderance for organizations is to implement a hiring freeze rather than lay off employees,” she said.
Regarding how layoffs are considered, 76% of business owners said they tend to evaluate based on performance, and 23% use “last in, first out,” according to the report. Not surprisingly, 79% said they were “very likely” (36%) or “likely” (43%) to fire workers who identify as quiet quitters – those who are disenchanted by their job and choose to do the bare minimum at work.
“For the most part, top producers do not get laid off. So being at the top of your game at work is the best way to evade coming layoffs,” Haller suggested in the report.
Still, an uncertain economy means businesses and organizations need to plan and budget for best-case and worst-case scenarios.
Per the report, 52% of companies currently have a hiring freeze in place for certain departments, and 19% have a company-wide hiring freeze. Meanwhile, only 27% of respondents say their organization had no hiring freeze.
When it comes to 2023, 70% of companies say they are “very likely” (38%) or “likely” (31%) to implement a hiring freeze. When looking at companies with more than 500 employees, 88% said they are likely to implement a hiring freeze, compared to 56% of organizations with less than 500 employees.
“With unknown variables in the workforce regarding not only internal workforce issues but also the changing culture around working today, hiring freezes may be a safer policy for companies to implement before layoffs are needed. With the talk of a recession, this may be what we will see in the coming months,” Haller pointed out.
Given the churning uncertainty that is building up with each passing economic report or data set, Haller recommends staying diligent and proactive with one’s resume and work portfolio.
“In today’s employment world, everyone should always be ready for their next opportunity. Resumes should always be up-to-date, and workers should remain active in their networks and on LinkedIn,” Haller said. “In this market, those who find themselves with reduced salaries may find an increase in salary with a new position elsewhere. If a layoff is announced, workers should be prepared to negotiate severance, outplacement, and other benefits they may be able to attain.”
All data found within this report was derived from a survey commissioned by ResumeBuilder.com and conducted online by the survey platform Pollfish on December 1, 2022. Learn more about how Pollfish’s methodology works here.
Key findings:
- 61% of business leaders say their organizations will likely have layoffs in 2023
- 57% of business leaders who say layoffs are likely estimate that 30% or more of their workforce will be laid off in 2023
- 70% of companies are likely to implement a hiring freeze in 2023
- 34% say their organizations are reducing or eliminating holiday gifts or bonuses this year; 27% reduced salaries of current employees
- 79% of business leaders say they’re likely to fire ‘quiet quitters.’
- 74% of business leaders agree it will be easier to fire poor performers next year due to employees losing bargaining power