The State of Layoffs
2026 marks the third year of LHH’s Mobility & Career Transition study.
The latest data shows how workforce decisions and employee experiences are shifting at scale.
Nine in ten US organizations are restructuring. Yes, it's an operations problem. It's also an identity crisis.
The global economy is noisy right now. Deafening, really.
Tariffs, AI, funding cuts, reshoring, offshoring – the signals change weekly, contradict each other daily, and, hour to hour make it hard to hear yourself think. But, within that noise, American businesses have reached a rare consensus: it's time to restructure.
In LHH's 2025 Career Transition and Mobility study, a three-year longitudinal survey of US Human Resources leaders and employees, a shocking 91% of organizations have either conducted layoffs or are planning them. Nearly half have already done it and are planning more. Only 5%* say they have no plans at all. Business leaders, known to loathe macroeconomic uncertainty, have, at least on this issue, stopped deliberating. They've decided.
But the "why" behind these layoffs is what's most revealing: Only 16% of these are the large-scale reductions that make headlines. The other 84% are something quieter and more consequential – ongoing, structural adjustments. Companies reshaping what the work is and who does it, not just how many people do it.
That distinction completely reframes how we look at the workforce in the years ahead. A one-time reduction is an operations problem (painful, but navigable with severance and a job search). Continuous restructuring is something else. It means the role someone built a career around may not exist in its current form next year. It means "getting the same job under a new logo" is becoming less and less viable as a transition strategy. For a growing number of professionals, this isn't a job loss. It's identity loss.
And most organizations aren't equipped for that.
Business leaders rarely agree on anything at this scale. When more than 90% of organizations say they are conducting or planning layoffs, it reflects a shared conclusion that the workforce itself has to change. This isn’t a handful of companies reacting to temporary pressure. It’s a broad recognition that the nature of work, the skills required, and the structure of organizations are all shifting at once.”
Since 2023, the "why" behind layoffs has fractured
To understand why, look at how the reasons behind layoffs have shifted. Three years ago, the drivers were concentrated and familiar. Cost-cutting led at 54%. Over-hiring and poor performance followed close behind. You could draw a straight line from the balance sheet to the layoff announcement.
That line is gone.
In 2025, no single driver accounts for more than 23% of layoffs. AI and automation, which didn't appear on the study at all in 2023 or 2024, is now tied with cost-cutting as the top reason US companies are restructuring (22.1% vs. 22.4%). Six entirely new structural drivers appeared for the first time: tariffs, government funding cuts, offshoring, reshoring, site closures, and AI-driven role elimination.
So no, it’s not just you – we’ve all been experiencing a lot of upheaval.
These novel drivers of layoffs all seemingly arrive simultaneously. And they're producing a different kind of layoff.
- Nearly half of US HR leaders (48%) describe their layoffs as "right-skilling," meaning regular, smaller-scale adjustments to the workforce's skill mix.
- Another 36% say they're responding to constant business and market change. Together, these two modes account for 84% of all layoff activity.
You can see this playing out in real time. In early 2026, IBM announced it is tripling its entry-level hiring – not by backfilling the same positions, but by rewriting junior roles across sectors to account for AI fluency. Same job titles. Completely different work. And IBM made these hires while simultaneously cutting thousands of other positions, leaving its U.S. headcount roughly flat. Growing – and shrinking – at the same time. That’s textbook right-skilling. That pattern (roles persisting in name while transforming in substance) may be what these survey numbers are starting to register.
If you don't yet have an answer for what right-skilling means for your workforce, you're not alone — most organizations are still figuring it out. But "figuring it out" assumes everyone inside the organization is looking at the same problem. They're not.
AN (UN)SHARED REALITY
Employees feel every fracture. HR doesn’t. There's a 35-point gap to prove it.
That figuring-it-out gets harder when the people making restructuring decisions and the people living through them aren't experiencing the same reality.
When we asked US HR leaders what support programs they provide to employees affected by layoffs, the answers were confident:
- 57% offer above-statutory severance.
- 56% provide training access.
- 53% say they make internal roles available.
- 55% offer financial planning assistance.
When we asked US employees what they've actually received, the numbers collapsed.
- 9% say they were offered severance.
- 17% report training access.
- 19% say they heard about internal roles.
- 15% received financial planning help.
The average gap across every major support category: 35 points.
A gap that wide reflects two groups experiencing the same organizational moment from fundamentally different positions, with fundamentally different information. And the broader workforce is watching.
The 35-point gap measures what happens to people who've been through restructuring. But the anxiety data tells a different story – what happens to the “survivors” kept on to move productivity forward?
Across 10 separate measures of workforce anxiety, from fear of AI replacing their role to uncertainty about what skills to pursue next, US workers followed an identical pattern over three years. Anxiety dipped in 2024. Then it surged to record highs in 2025.
Fear that AI will replace their job: 33% (2024) to 60% (2025). Fear of being personally laid off: 31% to 61%. Both nearly doubled in a single year.
Fear is not a neutral condition inside an organization. A workforce operating from fear doesn't experiment, doesn't volunteer for redeployment, doesn't raise its hand for the role that looks unfamiliar. It protects what it has. And continuous restructuring – the kind more than four in five organizations are now conducting – requires exactly the opposite: people willing to move toward uncertainty, not away from it.
That's what makes the 35-point gap so consequential. It's not a measurement discrepancy. It's the distance between the adaptive workforce organizations need and the defensive workforce they're creating.
You can see the defensive posture in the behavioral data.
- 86% of US workers report team burnout.
- 58% would consider recording their layoff on social media.
- And more than 85% are already using AI tools in their job search, most paying out of pocket – the numbers suggest it's the only move that feels available to them.
Workers aren't waiting for their organizations to figure this out. They're making real decisions based on what they see, not what HR intends.
THE REVERSAL
And the people managing the transition are breaking under it
You might assume the people on the other side of that gap (the ones designing and delivering the restructuring) are operating from a position of clarity. They're not. On three of four parallel statements about the psychological toll of restructuring, HR leaders score higher than the workers they're managing through it.
Among HR leaders, 72% say frequent restructuring has taken a toll on their mental wellbeing. Among workers, that figure is 63%. On confidence in leadership: 72% of HR leaders report it's been damaged, versus 68% of workers. On whether leadership has a long-term skills strategy: 69% of HR leaders say no, compared to 63% of workers.
The people responsible for guiding the organization through change are absorbing more of its damage. And they know they need help: 74% say they need more support to manage layoffs effectively.
Three years ago, burnout from increased workloads barely registered as a concern among HR leaders: just 6%. By 2025, it had reached 28%. What dropped in its place is telling: fear of lawsuits from former employees fell from 42% to 17%. The worry has migrated from legal exposure to something harder to manage. The people who stay are exhausted. The people who leave remember how it felt. And the people running the process are caught between both.
HR leaders are managing continuous workforce change while supporting employees who are leaving, stabilizing teams that remain, and helping the organization recruit, develop, and upskill — while mapping the skills it needs to thrive. They are at the helm of workforce transformation, where people decisions now directly shape business performance, workforce resilience, and the organization’s ability to adapt. Balancing restructuring with hiring and leadership alignment under this complexity puts HR squarely at the center of success in a rapidly evolving market.”
SIGNS OF REINVENTION
The talent infrastructure for a better approach exists. Here's what's getting in the way.
Organizations saw this coming. They invested. Eighty-seven percent of US organizations now have a formal redeployment program. Most (84%) believe that redeployment and upskilling would reduce the need for layoffs. And 81% of companies that track the cost of replacing laid-off employees say rehiring is more expensive than the layoff itself. The infrastructure is in place. The business case is understood. The economic argument is settled.
So why do 70% of US HR leaders say their own internal mobility programs are ineffective?
Nearly a third of HR leaders say they don't have the AI-powered systems to match employee skills with internal opportunities. But the tools gap is only part of it:
- A similar number say they lack long-term skills planning. They're reacting to each restructuring cycle instead of building ahead of the next one.
- One in four say open roles aren't visible enough inside their own organizations. A company lays off a dozen people in one department while struggling to fill roles in another, and nobody connects the two.
- Nearly a quarter name talent hoarding as a top barrier. The manager doing the hiring doesn't want to inherit someone else's people – leaders protecting their teams rather than sharing across them.
After speaking with so many HR leaders, one pattern comes up again and again: the biggest barrier to internal mobility is often the manager. Leaders say they want people to move to where the work is, but in practice managers are still protecting the talent they have. That tension makes it much harder for employees to step toward new roles inside the organization.”
The question isn't whether layoffs are the right call – sometimes they are. The question is how much institutional knowledge and talent could stay in-house, if the infrastructure to move people internally actually worked.
The share of organizations that have even considered redeployment over layoffs tripled in three years, from 29% to 93%. The intent is there. The investment is real. The gap is in execution.
And the World Economic Forum projects that while 92 million jobs will be displaced globally this decade, 170 million new ones will be created – a net gain of 78 million roles. The work isn't disappearing. It's transforming.
PAST IS PROLOGUE
Three years of data tell a story that’s important for every leader to understand.
The forces reshaping work are structural, not cyclical. Employees are experiencing something fundamentally different from what their organizations believe they're providing. The people managing the transition are absorbing more of its toll than anyone expected. And the infrastructure built to help (while real and growing) isn't yet designed for the new challenges in front of it.
It adds up to something the American workforce hasn't faced before – not just a downturn, but a potential wipeout of professional identity. It doesn't have to be that way. That challenge is about the distance between where work is heading and the identities people have built their careers around. Closing that distance, for the people being restructured, for the leaders managing it, and for the organizations trying to retain what they've built, is the work that matters most right now.
The full global report goes deeper into the data behind these findings, with regional analysis and a closer look at what's working in organizations that are getting this right.