Business News Daily provides resources, advice and product reviews to drive business growth. Our mission is to equip business owners with the knowledge and confidence to make informed decisions. As part of that, we recommend products and services for their success.
We collaborate with business-to-business vendors, connecting them with potential buyers. In some cases, we earn commissions when sales are made through our referrals. These financial relationships support our content but do not dictate our recommendations. Our editorial team independently evaluates products based on thousands of hours of research. We are committed to providing trustworthy advice for businesses. Learn more about our full process and see who our partners are here.
Some industries and roles have a greater risk of layoffs than others.
Massive layoffs have rocked the workforce within the past few years, with X, Meta, Salesforce, Goldman Sachs, Amazon and other high-profile companies laying off thousands as businesses scramble to get ahead.
Although small and midsize businesses (SMBs) have also seen layoffs, the layoff rate for SMBs declined from 1.4 percent to 1.3 percent between August 2022 and August 2023, according to pay and hiring data from Gusto. Additionally, in 2023, there was an 81-percent increase in hiring freezes due to rising inflation and labor costs, higher interest rates, reduced revenues, and fears of an impending recession, Glassdoor’s 2024 Employee Confidence Index found.
Despite these stats, some industries have been resilient, and the unemployment rate is near a historic low, at around 4 percent. Read on to discover which industries and roles have been affected most by recent layoffs.
Although it’s hard to determine the exact number of layoffs in each sector in recent months, data from the U.S. Bureau of Labor Statistics shows that 1.5 million people were laid off in March 2024 alone.
While layoffs in the arts and entertainment industries are declining, there has been an increase in layoffs within the private educational sector. Layoffs.fyi, a crowdsourced database that’s been tracking tech layoffs since the pandemic, reported that over 320 tech companies have laid off nearly 100,000 workers in 2024 alone. That number includes employees at major tech companies such as Intel and Google.
But the reductions aren’t entirely in the tech sector. Several other industries were affected by layoffs, including finance (Citigroup, PayPal) and fintech, media (Time, the Los Angeles Times), durable goods and information services.
Although there has been some improvement, workers are still concerned about job cuts. Glassdoor’s 2024 Employee Confidence Index captured the anxiety levels among workers of various roles. Although actual layoffs are currently at a historical low, workers are more worried than they’ve been since 2019. Mention of layoffs in Glassdoor reviews increased 27% year-over-year as of January 2024. Overall confidence is low across the board, with less than half of employees reporting a confident business outlook for the next six months.
In 2023, 240,000 jobs were lost in the tech sector alone. According to Revelio Labs, there was also an uptick in layoffs at the beginning of 2024. Employees in the construction, transportation and information services industries remain at the greatest risk of future layoffs.
Despite the cuts, the overall economy is still creating jobs, with the labor market boasting roughly 8.5 million job openings and 5.1 million hires. However, while the overall job market remains resilient, companies are still planning for a downturn.
JPMorgan Chase’s 2024 Business Leaders Outlook survey found that 31 percent of midsize business leaders in the U.S. were optimistic about the national economy.
Rising inflation remains top of mind among leaders when it comes to hiring. In NFIB’s May 2024 Small Business Optimism Index, 25 percent of small business owners cited inflation as the single most important problem in operating their businesses. Other factors included dramatic interest-rate hikes and rising input costs (supplies, inventory, energy and labor).
Despite these challenges, 56 percent of the businesses surveyed are continuing to hire. Still, after accounting for seasonal adjustment, the report found that only 11 percent were planning to create new jobs within the next three months. This is the lowest this figure has been since May 2020.
Traditionally, employers resort to cutting business expenses and jobs to save money. However, layoffs have detrimental long-term costs, including tarnishing a company’s reputation, creating knowledge gaps, lowering employee engagement and customer retention, and diminishing trust among workers and customers.
“Our team of employees is the lifeblood of our business, and we’ll run a loss before laying anyone off,” said Carson Lang, co-founder and chief operating officer of Test Prep Insight. “Other small businesses might not have that luxury, but to the extent you can weather the storm and keep people employed, I believe you’ll be better off for it in the long run.” Lang added that when you keep your team intact, you won’t be scrambling to hire at the same time as other companies when conditions improve.
Like Lang and other midsize business leaders who expect to hire new staff or keep their current teams, small business owners can take these steps to avoid layoffs:
No business owner wants to lay off workers. However, layoffs are sometimes necessary to ensure a business’s survival. The goals are to let workers go as painlessly as possible and to avoid public blowback. Consider the following best practices for laying off employees:
Layoffs are always bad news for everyone involved. Before you lay off staff, consider your options thoroughly to ensure you exhaust all alternatives. That way, you can make the process easier for everyone while minimizing damage to your leadership and business.
Natalie Hamingson contributed to this article.