Nearly 7 in 10 U.S. Leaders Anticipate Layoffs in the Next Year, LHH Study Finds

LHH’s survey of 600 HR and business leaders found 69% expect layoffs or reductions in force at their organizations over the next 12 months; expectations were 66% among HR leaders, 72% among business leaders and 80% among CEOs. Severance policies are shifting: 38% of organizations report making them less generous, up from 9% in the 2024 study, while 56% made them more generous, down from 76%. The survey also found wider access to career-transition support and that 99% of respondents routinely evaluate alternatives to involuntary reductions.

Analysis

The investable signal is weaker than the headline: this is a survey of large employers that already offer severance and outplacement, not a representative forecast of realized U.S. job losses. Intentions can be delayed, offset by hiring elsewhere, or replaced with redeployment and voluntary exits. Comparability with 2024 is also imperfect because the respondent mix and some question wording changed.

If cuts do materialize, the second-order effect is not simply a win for outplacement providers. Broader program access could lift volumes for LHH and competitors such as Right Management, but the shift of purchasing authority toward finance and procurement raises the risk of tighter vendor pricing and standardized, lower-touch services. More generous severance at some firms may support transition-service spend, while the sharp rise in firms reporting less-generous policies signals budget pressure; neither survey response establishes actual dollars spent.

For markets, treat this as a cautious labor-softening indicator, not an independent recession or earnings signal. A realized, broad-based slowdown could weigh on staffing demand and cyclical revenue, while easing wage pressure may benefit labor-intensive businesses and reduce inflation persistence. The 1–3 month catalyst is corroboration in payrolls, claims, hiring plans, and company guidance; the 6–18 month structural question is whether AI and workflow redesign produce durable headcount reductions rather than temporary cost actions. The contrarian risk is overreading executive expectations as a layoff count: stated plans may be aspirational, and alternatives to involuntary cuts are common. No standalone trade is warranted from this release.

Key Decisions for Investors

• Do not initiate a broad equity short on this survey alone. Use it as a watch signal and seek confirmation from payroll growth, continuing claims, staffing indicators, and downward revisions to company hiring or headcount guidance.
• Track Adecco Group and other outplacement providers for evidence that higher participant volumes convert into revenue without offsetting price concessions. The survey gives no contract values, utilization, or segment-level economics; absent those data, avoid treating the volume thesis as a long.
• For labor-sensitive exposure, prioritize company-specific diligence over a sector-wide position: test whether weaker hiring is showing up in staffing revenue and consumer-facing demand, while separately assessing any benefit from slower wage growth.
• Falsify the labor-softening thesis if subsequent employment data remain firm and large employers report stable hiring plans; strengthen it only if claims rise, payroll momentum weakens, and multiple companies confirm sustained headcount reductions.