The Growing 2025 Layoff Surge: How Companies Can Retain and Support Remaining Top Talent

New data from global outplacement firm Challenger, Gray & Christmas reveals that layoffs in the first half of 2025 are surging at a near-record pace. March 2025 alone posted the third-highest single-month layoff total in recorded history, a number only surpassed by the peak pandemic cutbacks of April and May 2020.

Through the end of May 2025, total announced layoffs hit 696,309 — an 80% increase compared to the first five months of 2024, and just 65,000 cuts short of matching the entire full-year layoff total for 2024. Multiple interconnected factors have driven this historic wave of job cuts, ranging from staffing and budget cuts at the Department of Government Efficiency (DOGE) and their broader industry ripple effects, to corporate adoption of automation and artificial intelligence that replaces human roles, to persistent sluggish consumer sales that force overhead reductions.

While the root causes of layoffs vary across sectors, one core business challenge remains the same for every organization cutting headcount: how do you keep remaining employees productive and prevent your top talent from leaving?

“The best performers always have other opportunities available to them, and no one wants to stay on an unstable ship — so this is the right question to ask,” explains Deborah Lovich, Future of Work fellow at the BCG Henderson Institute, Boston Consulting Group’s research think tank.

Show Compassion

Lovich notes that throughout every stage of the layoff process, it is critical to “treat people who are leaving with dignity, humanity, and tangible support.” Beyond being the ethical choice, this practice offers long-term benefits: departing employees may become customers, industry partners, or even boomerang employees down the line. Most importantly, how you treat exiting workers sends a clear message to the team that stays. “How you treat people during hard times reveals the soul of your company,” she says.

Allison Vaillancourt, vice president in the Organizational Effectiveness Practice at HR and benefits consultancy Segal, adds: “Leaders must demonstrate compassion throughout the entire layoff process. People want to be part of an organization they feel good about, and remaining staff will actively look for signs that their departing colleagues are being treated as kindly as possible during this difficult period.”

Address the Aftermath

When planning for operations after layoffs are finalized, Lovich advises leaders to use this moment of transition as an opportunity to “center employee enjoyment of work as a core criterion when reshaping the workplace.” This is an ideal time to streamline redundant processes and refocus work around the tasks and projects that employees find most engaging.

Carolyn Troyan, president and CEO of HR consulting firm Leadership 360, says it is important to allow for a “grieving period” for teams to process changes, while also proactively addressing common concerns about shifted workflows and increased workloads. “That’s almost always the first question I hear from remaining employees: ‘They cut all these people, now I have to do all their extra work — how am I supposed to keep up?’”

Leaders need to create a safe space for high performers to raise concerns, especially when most employees are hesitant to admit openly that they cannot handle the extra work left after their coworkers depart. Spot engagement surveys can help managers quickly identify friction points that signal unhappiness among top performers and other team members. Troyan also notes that many leaders benefit from redesigning office space to remove clusters of empty workstations, which act as a constant, demoralizing reminder of departed colleagues.