Bosses are using 'silent layoffs' and 'quiet firing' to get rid of employees. It could backfire. (2024)

Experts say that both can create public-relations disasters and harm company morale.

A cautionary tale

The most recent high-profile example of silent layoffs was when PwC's UK arm launched a voluntary-severance program earlier this year.

According to the Financial Times, PwC asked employees not to disclose that they had received a settlement and advised them what to write in their goodbye emails to colleagues.

A spokesperson for PwC told the FT that the voluntary layoffs were implemented to "respond to changing client demand, attrition rates, and new opportunities."

"Through limited targeted voluntary severance, we can continue to recruit at entry level and where different skills are needed," the statement said.

PwC declined to comment when contacted by Business Insider.

Amit Rawal, a management lecturer at City, University of London's Bayes Business School, told BI that silent layoffs had become "increasingly popular across larger corporations."

The goal of silent layoffs is likely to minimize the amount of negative traction the company receives. Eloise Skinner, a psychotherapist who focuses on workplace well-being, told BI that this strategy could be successful for a business if it's kept under the radar.

"Theoretically, by keeping layoffs relatively low profile, trust in the business — from stakeholders and existing employees — can be retained, and restructurings can happen without excessive external analysis," Skinner said.

But if the news is leaked, like in PwC's case, the trust is broken — both for current employees and the general public.

Quiet firing

Silent layoffs were made illegal in the US in February 2023 as part of the National Labor Relations Act. The ruling was enforced by the National Labor Relations Board, an independent federal agency that sets out regulations that most businesses must abide by.

Lucas Botzen, an HR expert and the CEO at Rivermate, told BI that the ruling stops businesses from creating nondisclosure agreements or any other kind of agreements that would prevent an "employee or employer from enjoying certain rights that are bestowed on them by law, such as speaking out against unlawful practices or discrimination."

But companies in the US are still finding ways to quietly cut employees by making their roles less appealing.

As BI previously reported, Dell told hybrid employees in February to return to the office three days a week regardless of where they lived. Workers who chose to be fully remote would face limited career progression, an anonymous source told The Register.

But according to internal data viewed by BI, by June, almost 50% of Dell's full-time US staff had decided to stay remote. About one-third of all international employees also opted to stay remote despite the prospects of limited career progression.

Amazon decided in October that employees who didn't come into the office three days a week may have their promotions blocked.

"Subtly encouraging someone to leave is seen as the easier option," Suzanne Horne, a partner in employment law at the legal firm Paul Hastings, told the BBC in 2022. "If the employee eventually resigns, it's the 'no-fault approach': Severance doesn't need to be paid, conflict is avoided and both parties are ultimately happy."

'A PR disaster waiting to happen'

Experts told BI that quietly getting rid of employees could easily backfire if they opt to fight back or speak out.

These tactics "breed mistrust, tarnish a company's reputation, and can lead to uncontrolled leaks of sensitive information," Evan Nierman, the founder and CEO of the PR firm Red Banyan, said. "The Cancel Culture Curse."

"When transparency is sacrificed, the rumor mill takes over, creating a narrative of fear and instability," he said.

Dan Buckley, an HR expert and CEO of Cognexo, an AI-led platform that helps boost the employee experience, told BI over email that silent layoffs are "usually a futile attempt to maintain morale among remaining employees and manage their brand."

"Open communication is crucial, and anything less invites suspicion and erodes brand integrity," Nierman said. "Ultimately, the cost of trying to silence your former employees will outweigh the short-term benefits of secrecy."

When it comes to quiet firing, Horne told the BBC that it could create an "us versus them" mentality. "You have the engaged employees, and then those just quietly left there, sometimes without their knowledge," she said. "It doesn't create an inclusive or high-performance workplace culture."

Correction: June 27, 2024 — A previous version of this article misstated when Amazon decided that employees who didn't come into the office three days a week may have their promotions blocked. It was in October, not November.