To avoid the costs and public pressure of formal layoffs, American companies are increasingly adopting the strategy of "quiet firing." According to a report released by Resume Templates on May 27, 53% of surveyed companies have implemented or plan to implement this strategy within 2025, with specific methods including cutting employee benefits, increasing workloads, and mandating more days in the office.

The report shows that although this practice appears effective in the short term, among companies that have already initiated "quiet firing" this year, nearly 90% (about 89%) admit that the strategy has led to a decline in employee morale.

"From a business perspective, quiet firing seems like an efficient way to reduce headcount without triggering layoffs, negative press, or severance costs," said Julia Toothacre, chief career strategist at Resume Templates. "But this approach is short-sighted. Creating an environment that pushes employees to leave voluntarily inevitably damages morale, productivity, and trust." She added, "It can also have a negative impact on future hiring. Frankly, when this strategy is widely adopted, companies risk losing high-performing employees, not just underperformers."

The survey is based on questionnaires from more than 1,100 U.S. business leaders. The results show that 42% of respondents said they have already initiated "quiet firing" in 2025, while another 11% plan to begin implementing it later this year.

In terms of motivation, nearly half of respondents said this approach helps manage underperforming employees; 41% of leaders admitted they are trying to push specific employees to leave, including those who prefer remote work. Additionally, some companies also hope to avoid paying severance, reduce legal risks, and sidestep the negative public relations that formal layoffs might trigger.

Responding leaders listed various specific methods of "quiet firing," including: delaying promotions or raises, enforcing stricter rules or policies, increasing workloads, mandating more days in the office, cutting pay or bonuses, reducing benefits, micromanaging employees, tolerating workplace misconduct, and using formal layoffs to demoralize remaining staff.

Despite the damage to morale, 85% of companies using this strategy still say it has been effective in encouraging employees to resign voluntarily. However, amid economic uncertainty, leaders also noted that if employees choose to endure due to a tough job market, or simply tolerate poor treatment without quitting, the effectiveness of "quiet firing" will be greatly diminished.

"Many employees are now choosing to stay not because of engagement, but because the job market makes them feel uncertain," Toothacre analyzed. "They are weighing the stress of a toxic work environment against the risk of finding a new job with lower pay. This trade-off puts employees into survival mode, which ultimately affects productivity."

On a broader level, how to balance budget constraints with hiring challenges is expected to be a key issue for HR departments in 2025. Previously, hiring experts told HR Dive, a sister publication of CFO Dive, that HR professionals need to demonstrate measurable impact, consider global talent pools, cultivate talent pipelines, prioritize internal mobility, and improve employee retention through perks or career development opportunities.

Meanwhile, frontline employees are particularly anxious. According to a report released by UKG, due to changes in global trade policies, more than 70% of frontline employees said they feel anxious, angry, and stressed. As a result, they have changed their work behaviors, such as working harder to prove their value, taking on more hours to prevent future hour cuts, and learning new skills or obtaining certifications to secure their employment.

Despite the strong April jobs report, economists expressed concerns about subsequent data. They told HR Dive that upcoming reports may reveal the impact of tariffs, layoffs, and employee burnout. If sustained uncertainty leads to economic contraction, the labor market may weaken accordingly.