A surge in layoffs during the first half of 2025 has neared record-breaking pace, with March’s total alone the third-highest number of single-month layoffs in history, according to outplacement firm Challenger, Gray & Christmas. That total was eclipsed only by April and May 2020 during the pandemic. The 696,309 layoffs announced through May of 2025 represent an increase of 80% over the first five months of last year and are just 65,000 short of matching 2024’s total layoff numbers.
The reasons for these enormous numbers are multifaceted, ranging from staffing and funding cuts by the Department of Government Efficiency (DOGE) and their ramifications, companies leaning in to automation and artificial intelligence to sluggish sales. And while the reasons may vary, business realities remain the same, even in the midst of layoffs. How can companies making cuts also keep the employees who remain productive—and retain top talent?
“The best people have other opportunities elsewhere and who wants to be on an unstable ship, right? So that’s exactly the right question,” says Deborah Lovich, a Future of Work fellow at BCG Henderson Institute, Boston Consulting Group’s think tank.
Show compassion
Lovich says that, throughout the layoffs, it’s important to “treat people who depart with dignity, humanity, and support.” In addition to being the right thing to do, they may become customers or partners in the future. Finally, doing so sends a signal to those who remain. “How you treat people in hard times is what the soul of the company is,” she says.
Allison Vaillancourt, a vice president in the Organizational Effectiveness Practice at HR and benefits consultancy Segal, adds: “Demonstrate compassion during the layoff process: People want to be part of an organization they feel good about, and they will be looking for evidence that others are being treated as kindly as possible during this difficult time.”
Address the aftermath
Lovich says that, as your team plans what happens after the layoffs, use the opportunity to “add employee enjoyment of work into the criteria for reshaping the workplace.” It’s a good time to streamline processes and focus on adding more of what employees enjoy in their work.
Carolyn Troyan, president and CEO of HR consulting firm Leadership 360, says it’s important to allow for a “grieving period,” but to also begin addressing concerns about redesigned workflow and other issues. “That’s usually the first thing I hear from employees: ‘They’re just going to lay people off, and I’m going to have to take all this extra work. How am I really going to do that?’”
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Leaders making sure they are compassionate and transparent as they engage in layoffs can help a workplace keep functioning and retain talent
