Layoffs have become a regular part of the U.S. workforce landscape, with serious effects on both those who leave and those who stay behind, according to a recent study by Careerminds. The report sheds light on how layoffs impact company reputations, employee morale, and retention.
The research, based on surveys conducted in late 2025 with 500 HR leaders and 500 employees from large U.S. organizations, found that nearly 70% of workers have shared or might share negative experiences from layoffs online. They use platforms like LinkedIn, Glassdoor, and Reddit to voice their frustrations, sometimes even posting videos of layoff meetings. This level of transparency is raising the stakes for employers, as unhappy employees’ stories can continue to damage a company’s reputation long after the layoffs are done.
According to the study, 39% of employees said layoffs made them view their employer more negatively. It also pointed out that layoffs are expected to stay common, with 57% of HR leaders saying their organizations are likely to conduct layoffs in the next year. Economic challenges, shifts in business priorities, and advances in AI are major factors driving this trend.
The report warns that layoffs can cause major trust issues, especially when employees feel secure but are surprised by sudden cuts. This shake-up not only affects those leaving but also those remaining. Forty percent of HR leaders reported that layoffs increased voluntary turnover, and 21% of employees said they might quit after a layoff event. High-performing employees are among the most likely to leave, which can hurt a company’s productivity and long-term strength.
When asked about how layoffs were handled, employees gave an average rating of 3.68 out of 5. While many felt the process was fair, over a third thought otherwise. There was also a gap in perception about communication: 83% of HR leaders believed their messages were empathetic, but only 64% of employees agreed.
The study revealed that many companies still focus heavily on exit procedures rather than helping employees move forward. Only 45% of companies offered career transition or outplacement services during layoffs, and just 42% provided options for redeployment within the organization.
Employees want more. They call for clearer and earlier communication, better career support, and fairer severance packages. Career expert Amanda Augustine from Careerminds emphasized that even simple help like résumé advice and interview tips can boost confidence for those looking for new jobs.
Supporting both laid-off employees and those who remain is critical. HR leaders say that keeping employees informed about the company’s future, promoting career growth, and involving leadership in open talks are among the best ways to ease the fallout after layoffs. Raymond Lee, president of Careerminds, said companies that help employees move on with confidence—whether inside or outside the company—can rebuild trust and engagement.
Outplacement services are highly valued. Mark C. Perna, CEO at TFS Results, highlighted that these services show care for people and protect a company’s reputation. About 88% of HR leaders and 86% of employees support such programs, which can include branding help, coaching, financial advice, and workshops.
As layoffs continue to shape the workplace, the study shows that how companies handle these moments matters more than ever for their reputation and their workforce’s stability.