Hearing constant layoff news can sometimes feel like a stressful dream you can’t wake up from.
And the stress might get worse as companies reach historic highs in workforce cutbacks. Intel’s recent announcement of a reduction-in-force (RIF) of up to 20% of its 109,000-person staff, or roughly 21,000 jobs, and UPS’s plans to cut 20,000 employees would make these RIFs among the largest in US history. The biggest RIFs typically have accompanied economic downturns, as when Citigroup laid off 50,000 employees in 2008, and Hewlett-Packard cut 27,000 jobs in 2012.
Economic fears loom large over a workforce that’s already seen 3.5 million layoffs or discharges so far in 2025. HR Brew spoke with economists about what recent RIFs could signal about the labor market and how HR pros can navigate the year ahead.
“There is absolutely economic uncertainty right now. There are many different policies that are at play…that have a lot of people and companies rightfully taking an approach of, ‘Let’s just sit and wait, see what happens when the dust settles,’” Rachel Sederberg, senior economist at Lightcast, told HR Brew.
What’s happening? Companies usually approach workforce strategies based on “exposure to risky factors,” Sederberg said. Tech companies and manufacturers, like Intel, might be more likely to reduce their workforce if they’re anticipating a higher cost to make their products with increased tariffs.
“Companies may be behaving that way, and being very cautious, and taking very just calculated moves of minimizing risk, because we don’t know. None of us know what is coming,” Sederberg said. Companies that offer a service might not be drastically impacted by increased tariffs, she added, and may take the approach of slowing down hiring efforts in anticipation of a recession or worsened economic conditions.
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HR executives need to be wary of hiring slowdowns, said Daniel Zhao, lead economist at Glassdoor. Mass layoffs aren’t necessarily an indicator of a bad labor market, he said, but a slowdown in hiring can be a sign of tougher times to come.
“[Think about] a new college grad who isn’t able to find a job, or that laid-off worker who isn’t able to find a new job to re-enter the labor force, or that working parent who is looking for work to supplement their household income, but can’t find a role,” Zhao said. “Those are all examples of how weaker hiring can impact American workers.”
What’s the HR strategy? Before companies slow down their hiring efforts or lay off workers, Zhao recommends that HR leaders engage in “scenario planning” for the range of outcomes that could happen over the next year, like a potential recession or even a positive bounce back in the economy.
Meanwhile, Sederberg advised steering clear of extreme measures like massive downsizing in uncertain times and, in the reverse, inflated hiring when times are going well, as with the hiring sprees in 2022 during the Great Resignation, because neither situation is “a forever reality,” she said.
“There’s always going to be changes in the business cycle. There’s always going to be peaks and valleys, and generally speaking, I think most companies just try to do the best they can to project,” she said. “They’re trying to project what they think is likely to happen in the short-to-medium future. Is that always easy? No. And, then when you start bringing global politics, it becomes even more difficult.”