The hidden cost of silent layoffs

Not all tech companies like to announce redundancies but what are the risks?

Employment lawyer Claire Taylor-Evans, Partner at Boyes Turner sets out some of the risks of silent layoffs and makes some suggestions on how companies can reduce them.

Large-scale tech redundancies are fast-emerging as a major workplace trend this year with organisations pointing to changes in strategy, efficiency enhancements, and organisational shifts to meet challenging market conditions. Within this, we’re also seeing a newer pattern of behaviour – the silent layoff. Like quiet firing but behind closed doors. Why are organisations going down this secretive route?

What do we mean by “silent layoffs”?

Silent layoffs are where organisations offer employees voluntary redundancy packages with the agreement that severance details will be kept completely confidential. Departures are not communicated internally or externally to minimise the fall-out that typically comes with these moves – be it reputation damage, wider employee unhappiness or the loss of customer confidence that can follow major redundancy rounds.

Why the silence?

In addition to the economic reasons driving tech layoffs, we’re still seeing organisations correct and readjust headcounts following the spate of post-Covid over hiring, accelerated by return to office strategies and AI.

Specific to silent layoffs, is that seemingly straightforward voluntary redundancy programmes are underpinned by demands that employees keep the terms of their exit quiet. In some cases, HR teams have provided scripts to explain departures as part of settlement agreements.

In an age of employee WhatsApp groups, loud quitting and revenge quitting on TikTok – where employees publicly make their employer dissatisfaction and reasons for leaving known – some HR departments are working overtime to manage how employees communicate their exits and to control their organisation’s narrative.

Understanding the risks of silent layoffs

Your organisation comes under the threat the moment a silent layoff stops being silent.

A leaked email or carefully shared screenshot can expose a business to higher risks. While you can agree on “reasons for leaving” in a settlement agreement, it won’t take long for surviving colleagues to do the maths, leading to an inevitable breakdown in organisational trust.

Consider too, the risk that an employee may choose to reject the voluntary redundancy offer. Should this lead to a compulsory redundancy further down the line, the conversation could be used against your organisation in a potential claim, bringing significant risk particularly if the employee claims that they have been selected to go because of any protected characteristic – age, race, sexual orientation for example.

It's important to recognise here that statistics point to women being disproportionately affected by tech layoffs. This occurs for several reasons. Women tend to be more represented in roles such as marketing, PR, recruiting and HR. These areas are often considered as not business critical therefore these are often the first positions to be cut. The same logic applies to part-time and remote roles which again tend to be occupied by women as they are more likely to seek to balance their paid work with family responsibilities.

In addition, women are less represented in both technical and senior leadership roles which again, exposes them to more risk.

The reality of the Trump Effect - and the wider scaling-back of DEI initiatives in the US – also means that even in the UK, programmes centring on inclusivity in the sector are being trimmed.

How to avoid the risks associated with silent layoffs

Silent layoffs are synonymous with an organisational absence of trust, respect and need to control a narrative. Avoiding silent layoffs and the associated risks demands a longer-term, foundational culture shift. Key steps that leadership teams can take include the following:

Opt for a culture of open communication. Keep employees up to date on company performance and the impact of market challenges, while engaging them in any changes in organisational strategy. Giving your people a sense of control and ownership of your business’ future will support morale, engagement, and productivity, which at best, can avoid the need for silent layoffs in the first place and at worst, ensures that the redundancy message does not come as a surprise.

Continue to offer clear support systems to foster trust and morale for affected employees that are left behind. This could range from career coaching and mentoring through to networking guidance. For employees who are impacted, job hunting tips and outplacement services will help employees transition into their next move with confidence and a sense of goodwill.

Restructures and reorganisations tend to highlight the division between leadership and people, creating an “us and them” gap that needs to be closed. Keep office doors open, avoid unexplained boardroom discussions and side-room conversations – all of which compound an atmosphere of mistrust. Compassion costs nothing and an in-person conversation rather than an email can make the difference between a resentful leaver and long-term employer advocate.

Organisations committed to inclusive workplace cultures, open communication and compassionate leadership will always be better placed to manage the challenges redundancies, doing so openly, transparently, with no need for closed doors.

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