Layoff fears grow: Report finds 45% of managers expect workforce cuts in 2025
Workforce uncertainty is set to intensify in 2025, with nearly half (45%) of U.S. managers anticipating layoffs at their companies, according to a recent report by Resume Templates. The survey, which gathered insights from 1,000 managers, highlights growing concerns over economic instability, industry shifts, and the impact of automation.
While 11% of managers stated layoffs are a certainty, another 34% deemed them “probable.” Most expect only moderate reductions, with 28% planning to cut fewer than 5% of employees and 44% forecasting cuts between 5% and 10%.
Why Are Layoffs Expected?
Several factors are contributing to the anticipated job cuts. Economic uncertainty remains a dominant concern, alongside industry-specific struggles and rising automation and artificial intelligence (AI) adoption. Some managers also pointed to overstaffing and potential policy shifts under the Trump administration as reasons for downsizing.
Julia Toothacre, chief career strategist at Resume Templates, noted that layoffs are often unpredictable. “You never know if a company will use performance metrics, last-in-first-out policies, or an across-the-board percentage cut to make decisions,” she said.
Adding to the uncertainty, 31% of surveyed companies have already imposed hiring freezes, while another 13% expect to implement one in 2025.
Beyond Layoffs: Other Cost-Cutting Moves
Layoffs aren’t the only strategy on the table. The report indicates that many companies will also reduce spending in other ways. Cutting employee bonuses emerged as the most common cost-saving approach, followed by shrinking office space and reducing salaries and benefits.
Notably, pay cuts won’t be uniform. While a third of managers expect company-wide salary reductions, another third plan to target underperforming employees. The remaining group said cuts would be applied selectively, such as at the executive level or for remote roles.
“Cutting salaries is rarely a smart move, especially if a company has recently laid off employees,” said Toothacre. “It can be damaging to morale, and if the company is still reporting strong profits or issuing executive bonuses, it may push employees to leave. In some cases, organizations may actually want attrition so they can restructure or rehire at lower salaries.”
What This Means for Job Seekers
The hiring outlook for 2025 appears mixed. A separate report from Express Employment Professionals found that job seekers are divided—half feel confident about securing new roles within six months, while the other half expect difficulties.
For those currently employed, the priority is finding better pay, career advancement opportunities, and improved work-life balance. However, skills gaps remain a challenge, with some workers lacking key hard or soft skills needed to compete in the job market.
How Companies Can Adapt
Despite looming layoffs, HR experts say organizations can take proactive steps to retain and develop talent. Investing in leadership training, upskilling programs, and internal promotions can help companies navigate a shifting labor market while maintaining employee engagement. Additionally, AI-driven hiring tools may streamline recruiting and improve candidate selection.
As economic and technological changes reshape the workplace, businesses and workers alike will need to adapt to stay competitive in the evolving job landscape.