Nearly Two-Thirds of HR Leaders Expect Layoffs in 2027: A Readiness Guide

For most of 2026 the labor market has been described as “low-hire, low-fire”: companies stopped adding people quickly, but they also held on to the people they had. A new survey suggests that second half of the description may be about to expire. According to HR Dive’s coverage of the LHH study, published on November 5, 2026, 66% of U.S. HR leaders expect workforce reductions over the next 12 months. LHH says that is roughly double the share recorded in its 2024 report.

This article walks through what the data says, why the most interesting numbers are not the headline figure, and what HR leaders can do now, while the question is still “if” and “how” rather than “today.”

The headline numbers

The LHH study surveyed 600 U.S. HR and business leaders. The expectations it records rise as you move up the organization chart:

• 66% of HR leaders expect layoffs in the next 12 months.
• 72% of business leaders expect layoffs in the same window.
• 80% of CEOs expect layoffs in the same window.

The gradient matters. HR is usually the function that sees headcount pressure last, because it tends to be brought into the conversation after a financial target has been set. That CEOs are the most likely group to expect cuts suggests the decision is being shaped at the top of the house, with HR cast in an execution role. LHH president John Morgan framed it this way: “Workforce reductions are among the hardest decisions leaders make,” and “In the year ahead, pressure to deliver results will make workforce decisions harder to defer.”

The phrase “harder to defer” is the important one. Deferral is what produced the low-fire market of the past year. If more leaders now believe deferral is no longer affordable, the labor market’s most reassuring feature starts to weaken.

What the wider labor data says

The survey lands in an unusual moment. HR Dive’s week-in-review reported that employment growth hit an unexpected high after months of tepid gains, and kurums.com covered the October payroll report in our piece on the US adding 165,000 jobs in October. A rebound in hiring and a rise in expected layoffs are not contradictory. Expectations in the LHH study are about the next 12 months, not about the current month, and they can coexist with a healthy near-term payroll number, especially if leaders expect margin pressure, AI-driven restructuring or higher financing costs to bite in 2027.

The same HR Dive article cites a related report that tech sector layoffs rose 67% year over year in July, just ahead of finance and government. That is a reminder that “layoffs expected” does not mean “layoffs everywhere.” Concentration in a few sectors can coexist with a stable aggregate. If you work in technology, finance or the public sector, the survey is closer to a forecast than a warning.

The more revealing story: severance is getting less generous

If you only read the headline, you might conclude that layoffs are simply coming back. The severance data shows something more specific: the way employers intend to do it is changing.

• In 2024, 76% of organizations said they offered more generous severance. In the latest study, that figure is 56%.
• The share of organizations that reduced their packages rose from 9% to 38%.

Put plainly, a growing minority of employers are planning to run reductions with less cash attached. That has three practical consequences.

1. Litigation and reputation risk go up. Severance is partly a goodwill instrument and partly a release-of-claims instrument. Leaner packages are more likely to be challenged and more likely to be shared publicly on professional networks. Employers should expect candidates and former employees to compare packages.

2. The employer brand pays the bill later. A company that cuts hard and cuts cheaply will be recruiting again within a couple of years. People remember how a company behaved on the way out.

3. The remaining employees are watching. The people who stay judge the fairness of the process by how departing colleagues are treated. A thin package can undo the retention benefit of a layoff that was otherwise well communicated.

Employers are leaning on alternatives and on career support

The study reports that 99% of respondents say their companies routinely examine alternatives to layoffs. The most common are:

• Retirement incentives: 42%
• Voluntary departure programs: 41%
• Redeployment: 38%
• Temporary leave: 38%

These options share a feature: they let the organization reduce cost while preserving some choice for employees. Voluntary programs in particular can reduce headcount without the damage of selecting individuals, though they carry the risk of losing people the company would rather keep. Redeployment is the most strategically attractive but the hardest to execute, because it requires an honest inventory of skills and a manager culture that releases talent rather than hoarding it.

Career transition support is expanding too. For nonexempt employees, access rose from 58% to 79%. For exempt employees it rose from 61% to 85%. Of the companies that provide transition services to nonexempt staff, 38% offer comprehensive programs such as one-on-one coaching and online tools. In other words, as cash packages thin out, support services are becoming the substitute that employers use to demonstrate good faith.

Who owns the decision is changing

One statistic in the study deserves more attention than it received. HR leads outplacement and separation decisions at 30% of organizations, down from 58% in 2024. CFOs now lead at 18% (up from 6%), and procurement leads at 13% (up from 2%).

That is a structural shift. When procurement is involved in outplacement, the vendor relationship is being treated as a spend category to be negotiated rather than a people-care service to be designed. That is not inherently bad. Procurement discipline can reduce cost and improve service levels. But it changes the conversation: price per participant can crowd out quality of coaching, and a vendor chosen on unit cost may not be the one a laid-off senior engineer would choose.

For HR leaders, the practical reading is that you need to bring a business case, not just a duty-of-care argument. Be ready to show finance what a poorly handled exit costs in unemployment claims, litigation, regretted attrition among survivors and employer-brand damage. Be ready to give procurement the quality criteria that should sit alongside price.

A readiness checklist for HR leaders

None of this requires announcing anything. It requires being prepared. Here is a working checklist.

1. Build the decision framework before you need it

Define the criteria for selecting roles and people, and document them. Keep them tied to business needs such as capabilities, customer segments and product lines, rather than to individual performance ratings that may not have been calibrated for this purpose. Have employment counsel review the framework, including any adverse-impact analysis, before names are attached.

2. Price the alternatives

Given that 99% of employers say they examine alternatives, make sure you can quantify them. What would a voluntary departure window cost, and what is the likely take-up? What does redeployment require in training budget and time? A short, costed menu lets you argue for the least damaging path with numbers instead of instinct.

3. Decide your severance philosophy now

Whether you offer a formula based on tenure, a flat minimum, or a discretionary scale, decide the principle in advance, and test it against what peers are doing. If you will be at the lean end of the market, plan what you will offer in place of cash: extended benefits, accelerated vesting where applicable, coaching, job-board access, or referral support.

4. Prepare the survivors’ plan

Most of the cost of a layoff shows up in the people who stay: lower engagement, higher voluntary attrition and slower decisions. HR Dive separately reported that workers are facing a “crisis of disengagement,” which means the baseline is already fragile. Plan manager briefings, clear communication on strategy and workload, and a retention approach for critical roles.

5. Align with finance and procurement early

Given the shift in who leads these decisions, build the relationship before the budget meeting. Agree on vendor selection criteria, service levels and what “good” looks like for outplacement. Treat it as a joint design problem.

6. Check your legal and compliance map

Notice obligations, consultation requirements and release rules differ by jurisdiction and by size of reduction. Multi-state or multi-country employers should map these requirements in advance rather than discover them under time pressure. This article is general information, not legal advice.

What this means for employees and job seekers

If you are an employee in a sector with higher layoff exposure, the survey is not a reason for panic, but it is a reason to prepare. Keep your skills current, document your achievements, maintain your professional network and understand your own financial runway. Know what your employment contract and local law say about notice and severance, because the data suggests employers may offer less than the market has been used to.

The fastest-moving area of opportunity right now is in roles tied to the skills behind the fastest-growing professions. We have tracked those in our guides on the rising professions of 2026 and the skills behind them.

Caveats worth keeping in mind

Surveys of expectations are not measurements of outcomes. Leaders who say they expect layoffs may be preparing contingency plans rather than committing to cuts, and the 600-respondent sample, while useful, cannot represent every industry or company size. The study is also U.S.-focused. Readers in other markets should treat the direction of travel as informative but local law and labor-market conditions as decisive. Finally, the comparison with 2024 depends on how LHH framed the question in each edition, so the “roughly double” claim should be read as indicative.

Bottom line

The low-fire era may be ending, and the signals are in three places: expectation of cuts has roughly doubled since 2024, severance is getting leaner, and decision authority is migrating toward finance and procurement. HR’s best response is not to resist that shift but to prepare for it: build the decision framework, cost the alternatives, define a severance philosophy, protect the survivors and make the quality case in the language that finance and procurement use. Teams that do this work in advance will manage reductions, if they come, more fairly, more cheaply and with less damage to the business that remains.

Sources: HR Dive, “Nearly two-thirds of HR leaders expect layoffs in 2027” (Nov. 5, 2026), reporting on LHH’s U.S. Severance and Separation Benefits Benchmark Study.