Bosses are using ‘silent lay-offs’ and ‘quiet firing’ to get rid of employees. It could backfire.

Experts warn that both can create PR disasters and harm company morale.

A cautionary tale

The most recent high-profile example of silent layoffs is PwC, a UK-based accounting firm that launched a voluntary severance program earlier this year.

According to the Financial Times, PwC asked employees not to disclose that they had received a settlement and advised them what to write in their goodbye emails to colleagues.

A spokesperson for PwC told FT that the voluntary lay-offs were implemented to “respond to changing client demand, attrition rates, and new opportunities.”

“Through limited targeted voluntary severance, we can continue to recruit at entry level and where different skills are needed,” the statement said.

PwC declined to comment when contacted by Business Insider.

Amit Rawal, a management lecturer at City University of London’s Bayes Business School, told BI that silent layoffs have become “increasingly popular across larger corporations.”

The goal of silent layoffs is likely to minimize the amount of negative traction the company receives. Eloise Skinner, a psychotherapist who focuses on workplace well-being, told BI that this strategy can be successful for a business if it’s kept under the radar.

“Theoretically, by keeping layoffs relatively low-profile, trust in the business — from stakeholders and existing employees — can be retained, and restructurings can happen without excessive external analysis,” Skinner said.

But if the news is leaked, like in PwC’s case, the trust is broken — both for current employees and the general public.

Quiet firing

Silent layoffs were made illegal across the US in February 2023 as part of the National Labor Relations Act. According to CNN, the ruling was enforced by the National Labor Relations Board, an independent federal agency that sets out regulations most businesses — with the exception of railroads and airlines — must abide by.

Lucas Botzen, an HR expert and CEO at Rivermate, told BI that the ruling stops businesses from creating nondisclosure agreements or any other kind of agreements that would prevent an “employee or employer from enjoying certain rights that are bestowed on them by law, such as speaking out against unlawful practices or discrimination.”

But companies in the US are still finding ways to quietly cut employees by making their roles less appealing.

As BI previously reported, technology firm Dell in February ordered hybrid employees to return to the office three days a week regardless of where they live. Workers who choose to be fully remote will face limited career progression, an anonymous source told The Register.

In November, Amazon decided that employees may have their promotions blocked if they didn’t come into the office for three days a week.

“Subtly encouraging someone to leave is seen as the easier option,” Suzanne Horne, a partner in employment law at legal firm Paul Hasting, told the BBC in 2022. “If the employee eventually resigns, it’s the ‘no-fault approach’: severance doesn’t need to be paid, conflict is avoided and both parties are ultimately happy.”

‘A PR disaster waiting to happen’

Experts told BI that quietly getting rid of employees could easily backfire when employees opt to fight back and speak out.

These tactics “breed mistrust, tarnish a company’s reputation, and can lead to uncontrolled leaks of sensitive information,” said Evan Nierman, founder of PR firm Red Banyan and author of “The Cancel Culture Curse.”

“When transparency is sacrificed, the rumor mill takes over, creating a narrative of fear and instability,” he said.

Dan Buckley is an HR expert and CEO of Cognexo, an AI-led platform that helps boost the employee experience. Speaking to BI over email, Buckley said silent lay-offs are “usually a futile attempt to maintain morale among remaining employees and manage their brand.”

“Open communication is crucial, and anything less invites suspicion and erodes brand integrity,” Nierman said.

“Ultimately, the cost of trying to silence your former employees will outweigh the short-term benefits of secrecy.”

When it comes to quiet firing, Horne told the BBC that it can create an “us versus them” mentality. “You have the engaged employees, and then those just quietly left there, sometimes without their knowledge,” she said. “It doesn’t create an inclusive or high-performance workplace culture.”