Sweeping layoffs continue into the summer months, forcing thousands of workers back into the job market. From May through August, Pave’s employment data indicates that layoffs remained elevated relative to the first quarter of 2022. Furthermore, as of August, layoffs were still occurring at more than twice the rate as seen in March, which is when layoffs first began spiking.
In the above plot, we indexed our measure of layoffs, using 100 layoffs per month as the year-to-date average. For this analysis, a layoff is defined as when a company with more than 50 full-time US employees had their headcount decline by 5% to 30% over a single day.
Just how severe are layoffs? And which workers were most impacted? The Pave Data Lab is breaking down the data to take a closer look at the 2022 layoff landscape.
Over the past four months, layoffs resulted in cutting 12%-13% of a company’s employees, on average. But, when it comes to layoffs, not all roles are equally at risk. Since a layoff is frequently paired with a hiring freeze, recruiting roles see the deepest cuts — with over 20% laid off, on average.
Customer Support and Office Management roles were also more likely than average to lose their jobs, with those teams suffering 16% and 14% cuts, respectively.
At the other end of the spectrum, teams in Product Management and Software Engineering saw smaller than average cuts, with both teams losing less than 10% of their employees. Accounting teams faced some of the least severe layoffs, averaging just 5% cut.
Additionally, professional level employees were more likely to be cut than Management, with the severity of layoffs averaging 14% and 11%, respectively.
The severity of cuts varied geographically, as well. Looking at the population of employees whose employers had a layoff this year, workers in the San Francisco and Denver markets were impacted the least. Well below 10% of analyzed employees from those metro areas were laid off.
Meanwhile, analyzed workers in New York City and Los Angeles were more likely to be laid off this year.
Surviving a layoff can be a double-edged sword, as many teams see morale drop while workloads increase. Pave looked at employees present both before and after a layoff occurred at their company, and the data revealed that some employees also took a pay cut as their companies laid off coworkers. The severity of these cuts varied by level, with professional workers taking relatively smaller cuts than their superiors, on average.
While executives took the highest average cut — facing a 10% salary reduction — some leaders saw incomes fall even more steeply. Among executives who did take pay cuts, Finance and Management execs took some of the largest cuts, at 17% and 20%, respectively.
The Pave Data Lab will continue to dig deeper on trends impacting hiring, compensation, and merit cycles as HR teams work to navigate the current market volatility.