US Professional and Technical Services Sector NAICS 54

Jul 28, 2025 - Large Companies Learn to Love Layoffs

• Major corporations are getting smaller and managers have learned to not shy away from layoffs and other staff reductions, and in some cases actually tout them as positives, as AI adoption slims down corporate staff. Big companies have looked to startups and their ability to earn millions in revenue as inspiration for treating large staffs as an impediment rather than a benefit. Companies including Wells Fargo, Amazon, Union Pacific, Verizon, and Bank of America have cut thousands of jobs this year and report improved profitability. In addition to layoffs and displacement from AI, other means used to cut staff have included hiring freezes, combining jobs into new roles, or even leaving positions unfilled after employees resign. Management roles have taken the biggest hit in this new dynamic with middle managers increasingly being let go in favor of flatter organizations.
• With more employers demanding a return to office (RTO) with the pandemic in the rear view, bosses are making changes to offices and office culture to lure workers. According to Scott Salmirs, CEO of workspace maintenance firm ABM Industries, RTO mandates will increase as employers now have the upper hand. Companies that streamlined operations and cut staff are leaving outdated buildings for smaller, high-quality space in central locations.”They’re also ditching their open-plan offices and adding more private spaces to make the space ‘more hospitable,’” said Salmirs. And employers must have good snacks and coffee, according to Salmirs, which matters greatly to employees. He also expects RTO mandates to be gradual, a “one more day” strategy designed to eventually get to four days a week in the office. Cleanliness and a healthy workplace are also important, with some companies hiring more cleaning staff to ensure worker comfort and buy-in.

• Publicly-traded US companies have shed 3.5% of their white-collar employees from 2022 to 2025, per employment data provider Live Data Technologies, as corporate America shifts to leaner workforces that work harder. The cycle of layoffs in down markets and hiring surges in profitable times is changing as sales and profits have boomed in recent years despite widespread staffing cuts. Companies are also becoming more efficient thanks to AI tools and other technology advancements. Management ranks in particular have been thinned out. In the last three years, public companies have cut managers by 6.1% and executives by 4.6%, leaving organizations more flat and asking existing employees to work harder. The trend reflects a reversal of the post-pandemic leverage rank-and-file employees enjoyed during the resulting white-collar boom. However, companies risk inviting employee morale issues and reduced productivity due to higher workloads and less staff.
• Recent college and high school graduates face a tough job market and are struggling to find work, despite an overall US unemployment rate of about 4%. For new college graduates looking for work, the unemployment rate is closer to 6.6% for the 12 months ending in May 2025. According to the US Labor Department, it is the highest level of unemployment for that group in a decade (minus the pandemic) and a 6% increase from the same period the year prior. By comparison, those ages 35 to 44 with a college degree have a 2.2% unemployment rate during that same stretch. An overall hiring slowdown in America in the face of economic worry about the economy is largely to blame. Hiring slowdowns don’t directly affect existing workers or always lead to layoffs, but they disproportionately hit those without a job, especially graduates looking for that first real job.