After watching the tech sector go through round after round of layoffs, a 2025 report from the Workforce Institute at UKG found something pretty staggering: 70% of the employees who kept their jobs are now actively looking for a new one. That number puts a massive problem squarely on tech HR’s desk, how in the world do you convince people to stay after an event that just proved their jobs aren’t safe?
Key Takeaways
- If you’re straight with your people about why layoffs happened and what the plan is now, you can see a 15% bump in retention among the staff who are left.
- Putting money into training and reskilling the people who stay can cut attrition by as much as 20% in the first year.
- When people see clear performance goals and fair pay adjustments after a layoff, trust and engagement can climb by 25%.
- You have to re-onboard your remaining staff. They need a structured process that clarifies their new roles and team dynamics or they’ll just burn out.
The 70% Exodus: A Crisis of Confidence
That 70% number from UKG’s 2025 Workforce Confidence Index isn’t just a data point. It’s a giant red flag signaling a total collapse in confidence. After a layoff, the people left behind, the “layoff survivors”, are dealing with a nasty cocktail of relief, guilt, and a constant low-grade anxiety about their own jobs. From what I’ve seen in the field, I think 70% is probably on the low end for a lot of tech companies. When you watch a colleague with years of good work get walked out the door with no warning, you can’t help but wonder when your turn is coming. It completely shatters that unspoken agreement that if you do good work, you’ll have some stability.
People start looking for stability and a place where they feel their work actually matters. If leadership ignores this, they’re practically inviting a second wave of resignations which can be even more destructive because it’s usually the top performers with deep institutional knowledge who leave first. The period right after a layoff is when your people are most exposed and at risk, and it demands that leadership and HR step up immediately and with genuine empathy.
The Cost of Inaction: A 2026 Turnover Rate Projection
If you don’t do anything about morale, a 2025 Gartner report says you can expect your voluntary turnover rate to jump by another 10-15% within a year. Think about the direct costs. Replacing a single software engineer who makes $150,000 can easily cost you $300,000 once you factor in recruiter fees, lost productivity, and the time other engineers spend interviewing and onboarding, which is a cost of 150-200% of salary that I see all the time for specialized tech jobs. And that’s before you even try to calculate the damage to team morale, the project delays, and the knowledge walking out the door.
Forget the money for a second. The hit to innovation and your ability to compete is huge. Tech companies run on the knowledge and skills of their people. When a senior engineer or PM walks, you’re not just losing their current work, you’re losing their deep understanding of your codebase, their relationships across the company, and all the good ideas they haven’t had yet. This brain drain makes it incredibly hard to build new things or react to the market. You can’t stop this with a few “we’re all in this together” emails. It requires a real plan.
Communication, Transparency, and Rebuilding Trust: A 15% Retention Boost
It’s not surprising that a late 2024 SHRM study found companies with clear and transparent communication after layoffs had a 15% higher retention rate. This isn’t about opening up the books on every financial detail. It’s about giving people a straight story: here’s why we had to do this, here’s the vision for the company moving forward, and here is exactly how your role fits into that plan. People need to hear the ‘why’ and understand what’s next for them personally.
In my experience with tech startups, if you don’t give people information, they’ll make it up, and the rumors are always worse than the reality. Leaders need to get out there in town halls, team meetings, and one-on-ones. You have to be ready to talk about the company’s health, what’s happening in the market, and the plan ahead. You also have to look people in the eye and acknowledge how much this sucks. Rebuilding trust takes sustained effort and time. It means being visible, saying the same thing in every forum, and taking the hard questions (even when the answers aren’t great). When people feel like you’re giving them the respect of a straight answer, they’re much more likely to stick around.
Investing in the Survivors: A 20% Reduction in Attrition
A 2025 Deloitte Human Capital Trends report showed that investing in serious professional development for the people who remain can cut attrition by 20% in the first year. This runs completely counter to the typical cost-cutting panic that sets in after a layoff. Yes, you need to be smart with money, but ignoring the development of your remaining people is a huge mistake. Their jobs just got bigger. They have expanded responsibilities and now need new skills to handle them. Giving them access to things like certification courses or mentorship isn’t just a perk. It shows you’re actually investing in their future with the company and helps them do their new, bigger job well.
Imagine you just cut your marketing team in half. The people left are now covering channels they haven’t touched before. Why not pay for them to get a certification in advanced analytics or take a course on AI-driven content strategies on Coursera for Business or edX? That kind of tangible investment shows them you see a path forward for them here, even if things have changed. It turns a moment of high anxiety into a genuine chance for them to grow their skills, which builds loyalty and makes them less likely to go looking for that growth at another company.
The Compensation Conundrum: Beyond the Paycheck
Most people think retention after layoffs is all about giving raises to the survivors who are now doing two jobs. But a 2024 study by Mercer found that just throwing money at people doesn’t work long-term if you don’t also fix the underlying problems with workload and career paths. The study was clear: people who felt their workload was unfair or didn’t see a purpose were twice as likely to leave, even if they got a raise. This is a classic mistake. Companies will hand out token raises hoping to calm everyone down, but the real reason people are unhappy is rarely just about the money.
What your employees really want is fairness. They want you to acknowledge their workload has increased and that it’s sustainable. They need to see a clear career path in the new, smaller organization. Performance reviews need to be transparent, and recognition has to be more than just a cheap plaque, especially when everyone is stressed. Just hiking salaries without fixing the systemic issues, the insane workload, the dead-end career paths, is just an expensive band-aid that won’t stop people from leaving. Real retention is built when people feel supported, valued, and can actually see a future for themselves at the company, even after everything that just happened.
Getting retention right after layoffs is one of the hardest things for HR to do, and it takes more than empty words. You need real empathy, brutally honest communication, and a willingness to invest in the people who are still there. The companies that get this right won’t just stop the bleeding. They’ll come out the other side with a team that’s more committed and resilient than before.
What is “layoff survivor sickness”?
It’s the psychological and emotional stress hitting employees who keep their jobs after a layoff. Common symptoms are guilt, anxiety about their own job security, a drop in morale and productivity, and a general feeling of mistrust toward the company.
How quickly should communication occur after layoffs?
Immediately. You should be talking to your remaining employees the same day, or the very next morning at the latest. Any delay just lets rumors and anxiety take over, which makes a bad situation worse. Leaders need to be ready to get in front of their teams and be direct.
What role does HR play in post-layoff employee retention?
HR’s job is to drive the response. That means organizing the communication plan, pointing people to support resources like mental health services, helping managers redesign roles and job descriptions, ensuring pay is adjusted fairly, and rolling out the training programs people need for their new responsibilities.
Are increased workloads inevitable after layoffs?
In the short term, yes, workloads almost always go up because fewer people are doing the same amount of work. But it shouldn’t be permanent. A good company will immediately start looking at its processes, ruthlessly prioritizing what’s important, and using technology or new training to make the workload manageable and stop people from burning out.
How can leadership rebuild trust with remaining employees?
Trust is rebuilt through consistent action. Leaders need to show empathy, be transparent in every communication, actually listen to what employees are worried about, and give a clear direction for the future. When people see the company investing in their training and well-being, credibility starts to return. Your actions have to match your words.
