When 28-year-old Amber Smith couldn’t submit an IT support ticket, she immediately knew what it meant: she’d just been laid off for the second time in a year.
Even before that moment, she’d felt on edge. Routine events—like her manager asking for a quick call or a sudden companywide meeting—would make her nervous.
This heightened anxiety reflects a broader shift in the workplace. Even though layoffs remain relatively low by historical standards, they’re top of mind for many employees, as companies cut back and worker leverage declines.
Amber Smith on a yellow background
Amber Smith faced two layoffs in two years. Courtesy of Amber Smith
White-collar workers are also grappling with other stresses: fears that AI will replace jobs, stricter return-to-office demands, and a “hardcore” culture that chips away at work-life balance. Meanwhile, the trend of “flattening” organizations by cutting middle managers has left employees worrying about their own job security.
“Workers are feeling disempowered,” said Michele Williams, a professor of management and entrepreneurship at the University of Iowa. She explained that this pattern of fear and insecurity was also visible during the 2008 recession and has resurfaced now.
“If the boss doesn’t say ‘hi’ when walking by, people wonder if they’re about to get fired,” Williams said. “Employees are scanning for social cues and overinterpreting them because they’re insecure.”
This tendency is known as “paranoid attribution,”—where workers see ominous meaning in normal workplace events. Is the snack selection worse because the company is struggling? Is the office getting warmer because management is saving on air conditioning? Do more interns signal budget strength or weakness?
Such anxiety isn’t just unpleasant—it’s bad for business. Employees distracted by fear and speculation are unlikely to perform at their best. While headline-grabbing layoffs are real, they’re often concentrated in certain white-collar sectors, especially at big-name firms. Overall, unemployment remains relatively low. But even though the broader labor market is healthy, hiring for white-collar roles has slowed, and promotions are harder to come by.
Layoff levels over time
2005
2010
2015
2020
2025
0.0
1.0M
2.0M
3.0M
Note: Layoffs spiked to nearly 13 million in March 2020 and 9.2 million in April 2020. Source: US Bureau of Labor Statistics via FRED
Juliana Kaplan/BI
Smith ultimately chose to leave corporate life altogether. Now self-employed as a content creator and reseller, she says she feels far less anxious. “I feel so much better because being self-employed, obviously, I’m not going to get laid off,” she said.
Monica Wiant, a 47-year-old copywriter in Minnesota, also faced two layoffs in two years—a pattern that changed how she thinks about work entirely.
The first time, she’d just organized a return-to-office party for her team. Ironically, she was coming off a stellar performance review as a vice president.
Monica Wiant with wildlife in the background
Monica Wiant has been on a career journey. Courtesy of Monica Wiant
“That day was like the worst surprise party I’ve ever been to,” Wiant recalled. Looking back, she can see the warning signs: her department’s budget was shrinking, they were expected to do more with less, advertising budgets were cut, and hiring slowed.
“I think so many companies have lost sight of how important employees’ human experiences are,” she said. “It’s incredibly hard to stay motivated in a workplace that’s downsizing, knowing that no matter how hard you work, you might not have a future there.”
How paranoia is reshaping work
Mark Freeman, 65, has seen this dynamic firsthand over 25 years in supply chain technology, including experiencing two layoffs himself.
His advice: “As soon as they say ‘don’t worry, no one’s going to get laid off,’ you should get your résumé out there and start looking. You can’t believe them.”
He emphasized staying agile and always being open to other opportunities. Waiting until after a layoff, he warned, leaves you playing catch-up.
Mark Freeman on a white background
Mark Freeman recommends being agile. Courtesy of Mark Freeman
Business Insider’s Tim Paradis has noted that layoff anxiety can sap productivity as workers shift energy from their tasks to constant worry. Williams agrees: when people become hypervigilant, they disengage from their work.
Ironically, some companies are leaning into this fear. By putting more weight on performance reviews, they hope employees will work harder, trying to prove their indispensability.
Williams said that while working hard is good advice when a raise or promotion seems achievable, pushing it too far can backfire. “You get workers hoarding knowledge to make themselves indispensable,” she said. “But knowledge sharing is what drives collaboration and innovation.”
Benjamin Friedrich, a professor at Northwestern’s Kellogg School of Management, noted that employees may be less willing to go the extra mile if they feel their trust in the company has been broken.
Still, not all worker power has vanished. Friedrich pointed out that some pandemic-era benefits remain resilient.
“If you look at remote work coverage—what share of workers can work from home at least some of the time—it’s stayed very stable,” he said.
By the time Wiant faced her second layoff, she was more prepared for the signs. While those experiences were painful, they also led her to reevaluate what she expects from her job.
“I don’t feel such a deep need to have all of my needs met at work,” she said. “I’ve realized I can find purpose, creative challenges, and intellectual stimulation in other parts of my life.”