Loud layoffs are giving way to quiet cutting as mandatory RTO and job reassignments put pressure on employees to ‘take it or leave it.’ Here’s why that’s just as bad as loud layoffs for employee relations
Employees have been using social media to expose poorly executed layoffs, yet another form of headcount reduction is festering quietly. It’s a “take it or leave it” approach that is forcing employees to accept diminished job options, including reduced schedules, fewer career advancement opportunities, and lower benefits. Although this tactic isn’t entirely new, it has been rebranded as “quiet cutting”. Quiet cutting is a strategy used by employers to encourage employees to leave without the negative publicity and the financial consequences of layoffs.
One obvious quiet-cutting strategy is tethering return-to-office (RTO) to career progression. For example, Dell has announced that hybrid workers must be in the office at least three days a week, no matter where they live, and says fully remote employees will face limited career progression. Similarly, Amazon has decided that employees who do not accept a three-day return-to-office policy may lose out on promotions. What makes this an effective quiet-cutting strategy? Taking away flexibility and opportunity can be both expensive and demotivating for employees. And in response, many employees may choose to move on.
Another more nuanced strategy is increasing performance pressure. For instance, Meta CEO Mark Zuckerburg declared this a “year of efficiency” by implementing bi-annual performance reviews and a tougher bonus system. This is an effective quiet-cutting strategy because tougher performance evaluations inevitably create self-doubt in employees. Workers want to feel valued and prefer to work in environments where they feel appreciated.
So why are employers quiet cutting now? The simple answer is they can.
A soft job market flips the power dynamic back to employers. During the “Great Resignation,” employees had all the leverage. Now that we’re past that, an uncertain job market has the opposite effect. Employees feel safer staying put – and as a result, tolerate more management pressure.
Besides the leverage that organizations have in this job market, there are other reasons organizations choose this strategy:
They want to protect their reputation and brand image, so they avoid negative publicity associated with mass layoffs.
They want to reduce legal risks like discrimination lawsuits that come with public layoffs.
They want to control the narrative by managing the optics of workforce reductions - it’s easier when it’s individuals vs. groups.
As quiet cutting becomes more prevalent in the job market, both employers and employees need to understand its implications. This trend can seriously affect employee morale, productivity, and company culture, and it's important to weigh the short-term gains against the long-term costs.
Quiet cutting doesn’t cut it.
Of course, getting let go never feels good, but no one appreciates the fear, anxiety, and resentment that comes with dragging it out. Not only do employees quickly see through quiet cutting, but they are more likely to “quiet quit” in response. They dig in their heels, do the bare minimum, ride out the demotion, and collect a paycheck while they look for new work.
As a result, the employer ends up with employees who distrust the organization and are actively disengaged. In a recent survey of 1,015 business owners and employees across four generations, it’s clear that quiet cutting doesn’t cut it:
56% of surveyed employees prefer straightforward termination.
One in three employees has experienced quiet cutting, with nearly half knowing an affected colleague.
50% of employees feel betrayed by this approach.
62% of those who were reassigned disliked their reassignment.
Almost 40% of quietly cut employees eventually leave, with another 28% planning to do so—but not so quietly.
Nearly 30% left a negative company review.
With the overwhelming increase in negative media coverage regarding layoffs, it’s no surprise that the majority of surveyed business owners understand that quiet cutting isn’t a great way to build trust. Fifty-four percent of respondents consider 'quiet cutting' to be unethical, while a full 70% of employers advocate for transparency when it comes to staff reductions.
Trading short-term gains for long-term consequences.
While there may be short-term financial gains to skipping the unemployment and severance payouts associated with layoffs, pushing employees to resign will almost certainly backfire on company culture, productivity, and long-term profit.
First, organizations will face decreased employee morale – how could they not? Feeling undervalued and constantly facing pressure to leave is demoralizing and destroys productivity and engagement. Just because employees haven’t been cut yet, doesn’t mean they won’t be preoccupied thinking about it and/or sympathizing with their teammates who are already gone. Organizations that rely on their remaining employees to remain productive are making a fool’s bet. 77% of surviving employees lose faith in the company and stop being champions.
Next, organizations will irreparably damage their employer brand. Glassdoor, anyone? While quiet cutting may spare an employer from the public blowback of a layoff, eroded trust will cause employee referrals to plummet and poor reviews to spike making it harder to attract and retain the best talent in the long run. Finally, organizations that choose this strategy open themselves up to legal disputes. Although quiet cutting isn’t illegal itself, constructive dismissal is. In legal terms constructive means something is declared to be effectively true based on the circumstances – even if it’s not technically true. Constructive dismissal – also called constructive termination or constructive discharge – means working conditions are bad or hostile enough that they are the equivalent of being fired. Although hard to prove, the time in court still requires financial and human resources better spent elsewhere.
Reductions in force are sometimes necessary yet never easy. However, when organizations prioritize transparency and respect, they can impact the extent to which they can protect employee and public trust instead of destroying it.
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