45% of Companies Expect Layoffs in 2025, Some Commit to Pay Cuts

Keeping with the trends from last year, over 45% of companies expect layoffs in 2025. Corporate downsizing has been the name of the game over the last few months, with businesses both big and small cutting down on their workforce. The layoff crisis is expected to continue in 2025, with employers predicting that their own companies will also turn to the same practices of reorganization.

There are many different reasons that these companies were provided for these layoffs, ranging from policies enforced by the new government to challenges in their respective industries. Around 28% of them expect that the mass layoffs coming in 2025 will be small-scale, affecting less than 5% of the workforce, but 44% believe that the numbers could be slightly bigger, ranging between 5-10% of the workers. 

Image: Freepik

Companies Expect More Layoffs in 2025, and The Predictions Are Hard to Deny

A survey conducted by ResumeTemplates in January revealed that 45% of companies are likely to lay off workers this year. To break down the numbers further, 11% of companies state that they will definitely lay off workers this year and 34% will “probably” do the same. As for the rest, only 16% are confident that they have no plans to cut jobs this year.

Around 3 in 10 companies or 31% of them, already have a hiring freeze in place to restrict how many workers are added to their numbers. Furthermore, 13% expect to follow suit and implement a hiring freeze later this year. All of this indicates that it might be a tough year for job hunters looking to find a new employment opportunity. 

Are Organizations Looking Into Alternatives to the Mass Layoffs Coming in 2025?

In addition to the corporate downsizing this year, employees could also see other cost-cutting measures take shape. From the survey, 32% of organizations plan on targeting bonuses, 25% aim to target the office space, 17% will cut or reduce benefits, and another 12% will hit where it hurts the most—salaries. These resource cuts are a more ideal alternative to layoffs, but they will still be unpleasant for the workers. 

Of the companies planning on cutting pay, the majority of them will focus on cuts across the board or on low-performing employees. 19% of them are aiming to make cuts at the executive level while another 16% will look at cuts for remote employees. 

The anti-remote work trend is something we’ve seen many employers take to. While this usually takes the shape of return-to-office policies, workers may need to prepare for an alternate tactic via pay cuts. 

Why Are Employers Predicting Layoffs This Year?

The primary reason why companies expect layoffs in 2025 is linked to the economic downturn they expect to see this year. Around 51% of them expect that the management of their finances will be what pushes them to cut down on their workforce and rechannel those resources elsewhere.

Approximately 39% of employers are also predicting layoffs as a result of industry-specific challenges, while the rising role of AI and automation lead the reasoning for 32% of them. Employers are also realising the potential for replacing existing workers with lower-cost workers who might be willing to settle for lesser pay.

For 24% of the employers from the survey, the changing federal policies that are expected with the switch in government are expected to steer them towards laying off some of their workforce in order to keep up with the changes that are expected from them.

While there are likely also other, more nuanced reasons for why mass layoffs are coming in 2025, we get a good sense of the factors that are leading the change. From all of the cited explanations, there is very little room for employees to influence the decision leading up to the axing of their jobs. 

Employees at Google have petitioned the company to be more considerate of their interests, but it is unclear if the organization will pay heed to their requests. For now, all employees can do is put their heads down and work diligently at their jobs in hopes that the wave of layoffs will skip over their organization for now. 

The post 45% of Companies Expect Layoffs in 2025, Some Commit to Pay Cuts appeared first on The HR Digest.

Source: New feed