Many Workers View Themselves as Expendable as Companies Pursue Layoffs
Inflation has come down, the jobless rate is low and the stock market is roaring, so why are Americans bearish on the economy? The short answer may be an erosion of trust.
Workers have mixed feelings about returning to the office. Many feel vulnerable and expendable in layoffs to preserve corporate profits. Women still bump into glass ceilings. Diversity, equity and inclusivity efforts are waning.
Many workers see their economic glass as half empty. And their trust of government to do something about it is declining.
BambooHR’s employee happiness index traces the short journey from the Great Resignation to the Great Gloom, as it reports employee happiness in 2023 has plummeted to an all-time low. The findings are in line with Gallup’s July 2023 survey showing 80 percent of Americans are dissatisfied with the direction of the United States, fueled by job dissatisfaction that has continued to drop since 2019.
The 2023 Edelman Trust Barometer, based on more than 32,000 online interviews in 28 countries conducted during November 2022, provides some evidence. The lead section of the report is titled, “Facing economic fears without a trust safety net.”
Ann Kowal Smith, founder and CEO of Reflection Point and frequent Forbes contributor, noted, “89% of respondents to the Edelman 2023 Trust Survey feared job loss more than nuclear war.”
“Layoffs used to be a last resort. Now they are ubiquitous, and companies are using them as a financial management tool,” Smith says. “The fear of job loss at all levels feels very real. So real, in fact, that this fear damages workplace productivity, erodes culture and eradicates trust. When layoffs happen once, it’s tough on everyone. When they happen over and over, they cause irreparable damage. There’s no going back.”
“Treating people as expendable when earnings need boosting is not a strategy – it’s a travesty,” Smith insists. “One that will destroy the future of work.” And one that is hollowing out trust and may account for the sour mood of the U.S. electorate in a presidential election year.
Many workers see their economic glass as half empty.
Edelman Trust Findings
According to the 2023 report, 24 of the 28 countries included in the survey reached all-time lows in answering the question, “My family and I will be better off in five years”. Thirty-six percent of American respondents gave a positive response, down from 40 percent a year earlier. Only respondents from China were slightly more optimistic than the year before.
The largest personal fears expressed by respondents were job loss (89%) and inflation (74%). The top two existential fears were climate change (76%) and nuclear war (72%). Governments and the media were blamed for fueling a cycle of distrust as sources of misleading information.
One of the more telling nuggets is the gaping difference in trust between high-income and low-income respondents. Low-income Americans were 23 percent less trusting than high-income Americans. The only country with a wider trust margin based on income was Thailand. The trust gap in China was 19 percent.
Based on survey responses, America is one of the most severely polarized nations, along with Colombia, South Africa, Argentina, Spain and Sweden. Drivers of polarization include distrust of government, economic pessimism and distrust in media.
Of the American respondents who identified as Republicans, 50 percent said the country’s divisions are entrenched, with only 25 percent expressing trust in government or media and 23 percent saying they would be better off in five years.
That contrasted sharply with Democratic responses – 33 percent said polarization is entrenched, more than 60 percent said they trusted government and media and 48 percent said they would be better off in five years.
Trust With Expectations
Despite growing economic pessimism and fear of job loss, the most trusted institution in the Edelman Barometer is business. The find suggests survey respondents regard business as the most competent and ethical, even though business leaders are the ones who order layoffs.
Respondents seemed to speak in their consumer voice by expecting more societal engagement from business. The list of issues they want to see business engaged with includes climate change, economic inequality, energy shortages, healthcare access, workforce reskilling and being a source of trustworthy information.
This consumer sentiment, if pursued, could easily put business in the bullseye of political issues that have become increasingly partisan and polarizing. Nevertheless, a solid majority of respondents expect CEOs to take public stans on employee treatment, climate change, discrimination, immigration and the wealth gap.
To insulate business leaders from attack, respondents urge them to be trusted information sources, base actions on science, don’t align with only one political party, act on the same values over time and link actions to staying competitive.
Speaking of Layoffs
There were 270,416 reported layoffs in 2023, a 396 percent jump from 2022. Around 240,000 of the layoffs were in the technology field. In just the first four weeks of 2024, tech companies laid off around 25,000 workers.
Reasons cited for layoffs include pruning pandemic hiring sprees, cutting costs to boost profits, job replacements with artificial intelligence, the impact of mergers and increased levels of outsourcing.
A recent Forbes article said, “The rise of AI is becoming a significant contributor to layoffs. A survey by ResumeBuilder.com found nearly 70 percent of employers are laying off workers to save money, and about 40 percent are doing it by bringing in AI. For instance, British Telecom plans to replace a fifth of its 55,000 job cuts with AI.”
