With staff reductions through June 30 this year totaling some 158,000 employees at technology companies alone, it’s safe to say that a number of corporate cultures are having a rough go.
According to research from Careerminds, it takes companies an average of 7.2 months to fully recover their workplace culture after a layoff. The finding was based on a survey of 600 full-time U.S. human resources leaders who had either led or been directly involved in a layoff within the past 24 months.
Most companies rebound within a year, although quite a few don’t — 25% of those polled said their company hasn’t yet recovered from its most recent layoff, and about 5% said they doubt their culture will ever return to its pre-layoff state.
Unsurprisingly, layoffs create trust issues among the remaining workers. Comparing average ratings before a layoff to the weeks immediately after, trust in senior leadership fell by 18.4%, trust in direct managers dipped by 14.7% and confidence in the company’s long-term future dropped 19.1%.
Those numbers have recovered somewhat since then, but trust in leadership, trust in direct managers and confidence in the company’s future are still down 10.3%, 7.3%, and 12.8% from pre-layoff levels.
Careerminds’ survey report cited a Harvard Business Review finding that after layoffs, companies see a 20% decline in job performance, a 41% falloff in job satisfaction and a 31% rise in voluntary turnover among remaining employees.
According to CareerMinds, the strategies most closely associated with faster culture recovery are the ones that send a clear message that the organization is still investing in its people.
“Initiatives such as team-building activities, upskilling opportunities, and career development programs can help rebuild trust, strengthen morale, and reassure employees that they’re valued and supported,” said Amanda Augustine, resident career expert for Careerminds.
For example, HR leaders at companies that held a team event after a layoff reported recovery times that were 22% faster than those that didn’t. However, relatively few companies take that action or several others that can positively affect recovery time.
On the other hand, some mitigation tactics barely work. For instance, holding an all-hands town hall was the third-most-common post-layoff action, with 36.8% of surveyed companies having done so, but it boosted recovery times by an average of just 0.3%.
Other big splits between actions taken and cultural recovery included extending healthcare coverage beyond the standard period for laid-off workers (21.8% vs. 1.4%), providing talking-points playbooks for people managers (9.3% vs. 0.6%) and ongoing pulse surveys (17.5% vs. 4%).
Major technology companies that have undergone workforce reductions recently include Oracle (up to 30,000), Amazon (16,000) and Meta (8,000). Layoffs also have heavily affected the media, finance and retail sectors.
