Layoffs don’t just cut pay cheques; they cut deep into people’s sense of stability, confidence, and identity. Even long after the exit, the impact lingers. People stop asking for raises, hesitate to take on stretch projects, and become less visible at work. The behavioural shift is real and measurable. Research shows that job loss and even just the threat of it triggers powerful psychological and behavioural effects: anxiety, withdrawal, risk avoidance, and long-term career setbacks. But with the right recognition and support, people can recover and reconnect with their potential.
What the Science Shows
1. Mental health takes a hit.
A meta-analysis of 324 studies confirms that unemployment significantly increases depression, anxiety, and psychological distress. In high-stress contexts (like post-disaster layoffs), PTSD symptoms can also emerge.
2. Earnings losses are large and long-lasting.
Displaced workers, especially those with long tenure, often experience persistent earnings declines of 20–25%. These “wage scars” remain across countries and economic cycles.
3. Health risks spike.
Among older, high-seniority men, mortality jumps 50–100% in the year following job loss. The stress isn’t just mental; it can be life-threatening.
4. Survivors suffer too.
Employees who remain after layoffs experience their own kind of fallout:
● Increased workload
● Heightened conflict and uncertainty
● Fewer advancement opportunities
● Declining work–life balance
5. Behaviour changes under threat.
Layoffs activate “threat-rigidity” responses: people narrow their focus, avoid risks, and stay quiet. The result is less creativity, fewer asks, and a retreat from opportunity.
How It Plays Out on the Ground
After a layoff, behavioural changes aren’t always obvious. But they’re there—and they matter:
● Less negotiating – Fewer requests for raises, stretch work, or promotions “Take more, ask less” – Saying yes to everything to avoid looking expendable
● Promotion avoidance – Avoiding applications or delaying career conversations
● Burnout risk – Long hours, mental fatigue, poor recovery
● Lingering fear – Job insecurity leads to cautious, self-protective behavior
These are not mindset problems; they’re trauma responses. And they can be processed, understood, and healed.
Coaching Reflection: How to Support Yourself or Others
Helping employees (or yourself) recover begins with acknowledging the emotional impact.
Layoffs don’t just remove a role; they create a wound that can quietly shape behaviour long after.
Use these coaching questions to reflect, reset, and rebuild:
● How might the layoff (or witnessing one) still be affecting how I show up?
● What am I avoiding—conversations, asks, visibility—that I didn’t before?
● Am I operating from confidence or from fear?
● Have I started playing small to feel safe?
● What stories am I telling myself about my value post-layoff—and are they true?
● What would it look like to ask for what I need again?
● Who can I talk to about this openly—with no shame, just honesty?
Remember: a layoff doesn’t define you. It doesn’t define your worth, your talent, or your trajectory.
The silence that follows is a normal response to trauma. But it doesn’t have to be permanent.
Final Thought
Layoffs don’t just impact the day someone leaves; they also affect the day someone returns. They echo for months, even years, reshaping behaviour, undermining confidence, and slowing careers.
However, when we make space to acknowledge the emotional weight and take small, intentional steps forward, we can begin to reclaim our voice, visibility, and momentum.