Layoffs Are Down, So Why Do Workers Feel Less Safe Than Ever?

Bashel Lubarsky had a nagging feeling on her commute to work in late October when a co-worker messaged her. By the time she opened her email and saw a layoff announcement, she suspected the worst. Minutes later, she stepped off the subway in downtown Brooklyn and was laid off during an impromptu Zoom call with HR.

Lubarsky, 28, a graphic designer and illustrator, had reason to feel secure: a promotion earlier in the year, skills used across multiple projects, and, as she jokes, likely the "cheapest" member of her team. "I never thought my job wasn't safe," she tells CNBC Make It.

Her unease is widespread. In the American Psychological Association's spring survey of 2,009 employed adults, 32% of U.S. workers said they were concerned about losing their job in the coming weeks or months, up from 26% a year earlier. Gallup found U.S. employee engagement fell to 29% in the third quarter of 2026, its lowest since 2011, while Glassdoor's employee confidence index hit its lowest point in September since the measure began in 2016, rebounding only slightly in October.

Yet layoffs are actually less severe than a year ago. Through October, employers announced 617,189 job cuts, down 44% from the same period in 2025, according to outplacement firm Challenger, Gray and Christmas. The heaviest cuts came in tech, transportation and food, with companies citing AI as a leading reason.

Daniel Zhao, chief economist at Glassdoor, says firms aren't simply replacing workers with AI but "shifting investment and headcount from one part of the business to another." That reallocation, he says, is scarier for workers because it doesn't matter whether your job can be done by AI, only whether your projects fit the company's AI-era strategy.

Briana Taylor, 35, of Chicago, learned that lesson at Microsoft, where she worked as a product marketing manager on AI products. Despite an "exceeded expectations" review that earned her a bonus and promotion, she was laid off in June 2025. "I feel like right now companies need something to blame, so they're using AI as a scapegoat," she says. Taylor took a pay cut in her next job and launched her own AI consultancy, Rethink to Rise AI, as a safety net.

Jo-Ellen Pozner, associate professor of management at Santa Clara University's Leavey School of Business, says stock market growth tied to AI expectations pressures tech firms to show results. "In the absence of a blockbuster new product introduction, lowering costs is probably the only way to do that," she says, adding that AI and automation make cutting headcount "that much more tempting."

Sometimes companies cut even while thriving: Microsoft offered voluntary buyouts to 60,000 employees in October, days before reporting 19% year-over-year revenue growth for the quarter ending Sept. 30. American Express and Barclays each announced 5% workforce cuts even as consumer spending and credit remained resilient.

The threat itself is corrosive, Pozner says, calling it "intensely destabilizing" as anxious employees divert energy from creative work into worry. "It's very counterproductive, and I think quite short-sighted."

Extra effort offers no guarantee. Sam Epperson, 33, of Colorado Springs, was told his tech sales team was behind on yearly goals and responded by closing deals worth $300,000 by early October. He was laid off before the month ended. "I very much so felt safe in my position until I was let go," he says.

Economists see signs of slow improvement, but Zhao says "we really are going to need to see consistent improvement in the job market" before workers feel reassured. Lubarsky, meanwhile, is building her freelance client book while job hunting, a search that has stretched over a year, even while employed. "I have everything you could need," she says. "I can't even get a response saying, 'No, thank you.'" It feels worse, she says, than the pandemic-era market she entered after graduating in 2020: "I still got a job within a year."