7 in 10 Companies Will Lay Off Employees Before EOY

Layoffs are stressful for employees, particularly when they occur around the holiday season.

In September, ResumeTemplates.com gathered insights from 1,038 business leaders about their workforce strategies and outlook for the rest of the year.

Study highlights:

• 72% of companies plan to have a round of layoffs before the end of year (EOY)
• 1 in 10 say these layoffs may not be necessary for the company’s success
• Performance management is the top reason for layoffs
• Majority of companies will give retained employees year-end bonuses

7 in 10 Companies Plan To Lay off Employees Before EOY

So far this year, 95% of companies say they have laid off employees.  Before the end of 2024, 72% of companies will have a round of layoffs.

1 in 10 companies may be laying off employees unnecessarily

Nearly 89% of companies consider the layoffs absolutely necessary for their future success, while 7% do not, and 4% are unsure.

The main reasons for layoffs are performance management (59%) and cost-cutting (59%), followed by budget reallocation (55%) and preparing for future growth (52%). Restructuring is a factor for 51%, while 33% of companies aim to avoid future severance costs, and 30% cite tax benefits. Additionally, 29% of companies mention shareholder pressure as a reason for their upcoming layoffs.

“Companies need to consider the overall impact of layoffs, not only on those let go but on the employees who stay. Of the employees who remain, morale will be significantly impacted, especially during the holidays. They may feel frustration and anger towards leadership,” says Chief Career Strategist Julia Toothacre.

“If you happen to be laid off during the holiday, get the unemployment process going as quickly as possible. Next, start applying for positions, but the holidays can be a tricky hiring time. Finally, there are a lot of companies who hire extra help over the holidays, and those positions might be a good option to get you through until unemployment comes in or you get another job.”

Majority of Companies Will Give Retained Employees Bonuses

In terms of year-end bonuses to retained employees, 57% of companies say all employees will receive bonuses, 33% say some employees will, and 6% say no bonuses will be given. Additionally, 3% are undecided.

For companies that will only give some employees bonuses, 44% say they will be reserved for executives only.

“Bonuses are great for employees, especially during the holidays, but many will wonder why bonuses can be given out after a round of layoffs. Companies need to consider the optics when making these decisions. If you’re an executive accepting a bonus during a year when your organization has done layoffs, you might want to reconsider. In many cases, bonuses are built into contracts based on targets that need to be met, but it’s still your choice to accept it,” says Toothacre.

Majority of Companies Plan To Offer Voluntary Buyouts or Early Retirement as an Alternative To Layoffs

Around 49% of companies plan to offer both voluntary buyouts and early retirement as alternatives to layoffs. About 24% will offer voluntary buyouts only, while 15% will offer early retirement. Meanwhile, 10% of companies plan to offer neither option, and 2% are unsure.

“​​Voluntary buyouts or early retirement offers are great alternatives to layoffs in an organization. This puts the power in the hands of the employees to make the best decisions for themselves and their families. This should be the first step most organizations make before resorting to a layoff,” says Toothacre.

This survey was conducted in September 2024. It surveyed 1,038 U.S. business leaders in total.. Appropriate respondents were found through demographic criteria and a screening question.

To take the survey, respondents had to be over 25 years old, have a household income of at least $75,000, an education level above high school, and currently work at a company with more than 10 employees. Respondents also had to be in one of the following organizational roles: owner, partner, president/CEO/chairperson, C-level executive, chief financial officer, chief technology officer, senior management, director, or human resources manager.