Survey of Recently Laid-Off Workers
Yet news about mass layoffs, especially in tech, dominated headlines in late 2022 and continues to do so in 2023. Google Trends data shows that search interest in the term “layoff” is experiencing the largest spike since the Covid recession and the Great Recession.
The Federal Reserve Board projects that unemployment will rise to 4.6% in 2023, which would imply more than a million net job losses in the coming months. Already, there are some signs that layoffs have ticked upwards recently and that demand for new hires is softening.
To go beyond the headlines and the official data and explore recent trends regarding layoffs in greater detail, ZipRecruiter conducted a survey between January 13 and January 29, 2023, of more than 2,000 U.S. residents who got laid off at some point in the prior six months. The survey asked recently laid-off workers about their layoff, job search, and reemployment experiences, as well as their expectations and plans regarding the future.
The report below traces their journeys.
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Many laid-off workers were caught off guard
More than half (52%) of laid-off workers were surprised to learn that they would lose their jobs, saying there were no early warning signs of looming job cuts at their companies. Workers in insurance (64%), the automotive industry (59%), and transportation (58%) were most likely to have been caught off guard.
Among those workers who did see early warning signs of layoffs, 38% reported being given less work right before being laid off, and 35% said there was less business activity in the runup to the layoff announcement. 30% said their working hours were cut, and 29% said there were budget cuts prior to layoff announcements.
Workers in the financial, construction, and technology sectors were disproportionately affected.
Workers in customer service (representing 14% of all laid-off workers), sales (11%), technology and IT (10%), and operations (10%) functions were most heavily affected by layoffs.
Most workers think layoffs were handled well
Before the pandemic, most layoff announcements were delivered in person. Early in the pandemic, when many businesses had already closed offices and asked employees to work from home, many layoff announcements were delivered by phone or video conference. Now, companies are conducting layoffs both in person and virtually.
58% of the workers in our survey were informed about their layoffs in person—42% in a one-on-one meeting and 16% in a group setting.
Within the group of 42% who were informed virtually, 13% were informed on a phone call, 12% via email, 7% via text message, and another 4% via video call.
Real estate companies, government agencies, and financial services companies appear to have conducted the most employee-friendly layoffs, with more than 3 in 4 workers in those sectors saying that they were treated well during the process.
22% of laid-off employees were offered career advising or job search assistance on their way out the door. Workers in tech (39%), advertising & marketing (39%), and real estate (35%) were most likely to report receiving access to such services.
2 in 3 laid-off workers said they were treated respectfully by their employers during layoffs.
Most workers—56%—say they would return to the company that laid them off if given the opportunity.
1 in 3 laid-off workers received severance pay—worth 16 weeks’ pay, on average
Only 1 in 3 recently laid-off workers received severance pay, but those who did received 16 weeks’ worth of pay, on average. That far exceeds the current median unemployment duration of about 9 weeks, and may partly explain why unemployment insurance rolls haven’t swelled more substantially in response to recent mass layoffs.
Workers in financial services (57%), technology (56%), advertising & marketing (49%), and real estate (48%) were the most likely to have received severance.
Workers in large, publicly traded companies (43%) were substantially more likely to have received severance than those in small businesses (30%).
Severance plans were most generous in the automotive industry (23 weeks’ worth of pay), advertising & marketing (22 weeks), agriculture (22 weeks), and utilities (22 weeks).
About 2 in 3 recently laid-off workers say they have either applied for unemployment benefits or plan to do so.
Despite severance and unemployment benefits, most laid-off workers reduced their spending
The vast majority of laid-off workers say they cut their spending as a result of the layoff. Others decided to take time off between jobs or stop working for a longer period. Through those reductions in spending and labor force participation, layoffs are likely to have some macroeconomic ripple effects.
80% of laid-off workers say they have reduced their spending since their layoff. That could partly explain the recent decline in consumption growth.
81% say they paused a major personal expenditure or investment as a result of their layoff. For example, 32% canceled a vacation, 20% delayed educational investments, and 26% have delayed buying a home.
18% of laid-off workers who have not yet found new jobs say they plan to take time off before searching for a new job or plan to do something else other than paid work going forward. That suggests the experience of being laid off could reduce some workers’ labor supply going forward.
More active job seekers have higher reemployment rates
55% of workers who were laid off in December or January reported having found a new job by the end of January, although not all had found jobs with comparable pay. Overall, it took reemployed workers 7 weeks, on average, to find their new jobs. For most, doing so required consistent job search effort.
Among those laid-off workers who are already reemployed, 61% say they searched for jobs daily after their layoff. Among those who have not yet found a job, only 15% say they are searching daily.
1 in 3 laid-off workers says they have been recruited by a potential employer since their layoff. In fact, 45% of all laid-off workers who have already found a new job got recruited for that job. That suggests there are still employers actively searching for candidates, even if recruiting intensity has recently subsided.
Laid-off workers in advertising & marketing (66%), the automotive industry (58%), and technology (56%) are most likely to have already found a new opportunity.
Laid-off workers can afford not to work for 3.3 months, on average
Laid-off workers who are still looking for a job say they can afford to go without a paycheck for 3.3 months, on average, before they run out of money.
Parents with young children have less runway, with only 2.7 months to go before they feel financial pressure.
More-educated workers can afford to go without a paycheck for longer. Those who have completed graduate school say their savings will last as long as 5 months, on average, whereas those without a high school diploma say their savings will only last 2.1 months, on average.
Of those who have already found a new job, 70% say they experienced financial pressure after their layoff.
50% of laid-off workers say they had enough personal savings to cover their expenses after losing their paychecks. Others credited support from family and friends (33%) or unemployment benefits (23%) with having allowed them to make ends meet. Another 34% say they cut their expenses significantly.
30% of parents said they had to take their children out of childcare following their layoff.
The stigma of layoffs persists
Many people affected by recent layoffs have publicly shared their stories on social media. But doing so is still the exception, not the rule, according to our survey.
83% of laid-off workers told family members about their layoff, 60% told their friends, and 19% told their professional networks. Only 11% shared the news on their social media accounts. 8% of all laid-off workers have not shared the news with anyone, not even close family.
Only 20% of laid-off workers say they shared the information with potential employers.
Women are more likely than men to share the news with their families but less likely to share it with anyone outside their close family.
57% of laid-off workers who are still unemployed believe that the fact that they were laid off is harming their job search prospects. 30% say they have less bargaining power as a result, and 27% say they worry potential employers will see it as a sign of poor performance.
Even among laid-off workers who have found new jobs, nearly 7 in 10 say that being laid off affected their job search and its outcomes in some ways.
Among reemployed workers, 37% say they believe they could have found a better job, 28% say they could have negotiated better, and 16% say they could have found a job sooner had they not been laid off.
Laid-off workers care more about job security now
After their layoff experience, workers say they care more now about job security, pay, and benefits than they did before, and less about seniority, career growth, or flexibility.
3 in 5 workers say job security has become more important to them, 58% say pay has, and 47% say benefits have.
At the same time, 30% say seniority has become less important, 23% say remote work, and 17% say so of promotion opportunities.
Among those seeking part-time jobs, schedule concerns (52%), pay (48%), and work-life balance (48%) have become more important.
Many laid-off workers are entertaining multiple job offers
Among laid-off workers who have already found new jobs, 3 in 4 say they had more than one job offer to choose from. And among those who have yet to find a new job, 1 in 2 have already secured at least one offer.
Among all laid-off workers—both those who are now employed and those still unemployed—those who worked in advertising & marketing (88%), the automotive industry (86%), and transportation (81%) are most likely to have received at least one job offer.
Among those who have been reemployed, laid-off workers in automotive (76%), manufacturing (84%), and retail (79%) are most likely to have received multiple job offers.
Some laid-off workers are coming out ahead
Among those laid-off workers who have already started new jobs, 42% found jobs that pay more than their old jobs, and 37% are paid about the same. Only 21% took a pay cut. Among those who got a pay increase, the average pay boost was 23%.
Laid-off workers in advertising & marketing (59%), government (53%), utilities (50%), technology (50%), food & beverages (50%), and education (50%) are most likely to have received a pay increase.
Pay increases were largest, as a share of prior income, in advertising & marketing (+39%), healthcare (+26%), financial services (+23%), technology (+25%), and education (+25%).
The most-educated workers and the least-educated workers reported receiving the largest pay increases. Among those with graduate degrees, pay increases averaged +32%, and among those without high school diplomas, pay increases averaged +31%.
Many laid-off workers are changing careers and industries
Among laid-off workers who have found new jobs, nearly 2 in 5 have switched occupations or industries. And among those still unemployed, 63% are considering changing occupations.
Laid-off workers from business support (63%), real estate (60%), and advertising & marketing roles (56%) are most likely to have switched industries.
Job seekers in agriculture (88%), advertising & marketing (88%), food & beverages (83%), and manufacturing (80%) are most open to changing occupations or industries.
Returning to the question of why layoffs dominated news headlines but were barely visible in official employment data through January 2023, our survey provides several explanations for why recent layoffs haven’t yet had more severe macroeconomic consequences. While the layoffs came as a shock to most affected workers, many discovered that their reemployment prospects were better than they had expected.
Even among workers laid off in December and January—a time of year when layoffs tend to be highest and hiring slowest—many laid-off workers were able to find better-paying jobs within weeks. Half have secured at least one job offer, and 1 in 3 have been recruited by an employer. Relatively few laid-off workers have had to sacrifice schedule flexibility or work-life balance in their new jobs.
Research shows that laid-off workers do far worse if the unemployment rate is high than if it is low. One study found that laid-off men lose 2.8 years of pre-layoff earnings when the unemployment rate exceeds 8%, but only 1.4 years of earnings when the unemployment rate is below 6%.
As of publication, the unemployment rate is just 3.4%—the lowest in more than 50 years. There is little prior research on how layoffs affect the economy when the unemployment rate is that low. Evidence from our recent survey suggests that they may be substantially less damaging, both to the individuals directly affected, and the broader economy.
If, however, hiring slows further in 2023 and the unemployment rate rises, the ground could shift under laid-off workers’ feet. The personal, macroeconomic, and fiscal impact of layoffs would then expand, even if the number of layoffs remains historically low. If instead, layoffs accelerate, displaced workers could see both their reemployment chances and conditions deteriorate.
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Methodology:
ZipRecruiter conducted a nationally representative survey between January 13 and January 29, 2023 to explore the layoff, job search, and reemployment experiences of more than 2,000 U.S. residents who got laid off at some point in the prior 6 months.
The survey is administered to a Qualtrics panel of 2000+ U.S. workers who have been affected by recent layoffs across all industries within the prior 6 months. Survey respondents may be currently reemployed or unemployed, but must reside in the United States and older than age 18 in order to be included in the sample.
In addition to the screening and demographic questions in the survey, respondents are asked several questions relating to their layoff experience, current and past job search, financial needs, as well as their expectations, desires, and requirements for current and future employment.