‘Quiet cutting’ has emerged as a nuanced approach to workforce management thanks to the workforce dynamics of today. Unlike traditional employee layoffs, quiet cutting involves the elimination of positions within a company without overtly resorting to mass firings. Instead, it relies on attrition, early retirements, reassignments and not filling vacant positions.
The pivotal question here is: Is quiet cutting a more favourable option than layoffs?
Emmanuel David, senior HR leader, points out that quiet cutting is a relatively new term, but the concept itself has existed for years. Employees find their roles gone, though they remain in the company, prompting dynamic shifts in the workforce. “It’s a delicate balance between cost-cutting and employee welfare. Two decades ago, a similar scenario unfolded when stock prices soared but post-sales services dwindled. The team addressed the issue openly, identifying solutions that led to workforce relocation and a harmonious outcome.”
Instead of resorting to employee layoffs, organisations are eliminating positions, and Samir Bhiwapurkar, head of HR and general administration, Japfa Comfeed, believes that this presents a unique dynamic in the workforce.
“This strategy strives to balance the company’s operational needs with the well-being of its employees — the positions vanish leaving individuals without designated roles but still within the organisation. The strategy involves re-evaluating the roles of employees, potentially leading to the redistribution of responsibilities among the workforce.”
The practice of quiet cutting in workplaces can have profound effects on various aspects of employee dynamics. One of the most significant consequences is the prevailing sense of uncertainty among employees. As positions gradually fade away or remain vacant, a palpable apprehension about the future of both individual roles and the company as a whole takes root. This uncertainty, in turn, contributes to elevated stress levels, decreased morale and a workforce that is easily distracted from its tasks. Additionally, as staffing levels decrease due to quiet cuts, existing employees find themselves grappling with heightened workloads.
“This strategy strives to balance the company’s operational needs with the well-being of its employees — the positions vanish leaving individuals without designated roles but still within the organisation”
Samir Bhiwapurkar, head of HR and general administration, Japfa Comfeed
The need to compensate for the loss of positions means that individuals often have to shoulder additional responsibilities, leading to burnout and a decline in job satisfaction. The struggle to manage expanded tasks can subsequently impact the quality of work and overall productivity, undermining the company’s operations. Additionally, quiet cutting can spark a reshaping of team dynamics, compelling team members to undertake new roles or collaborate more closely due to the reduced manpower. While this can foster a sense of camaraderie and teamwork, the absence of clear role definitions may lead to friction among team members or a perception of an unfair distribution of responsibilities.
Bhiwapurkar further adds that annual promotions often occur without corresponding changes in responsibilities, and this strategy prompts a reassessment, compelling individuals to step up or face the prospect of redundancy.
“This practice, known as right sizing, ensures that the organisation’s composition aligns with its needs, favouring employees who embrace new responsibilities and challenges. It’s a strategy that prioritises adaptability and employee growth while fostering a positive organisational outlook. In considering this approach, the organisation sends a message that its changes are not indicative of poor performance but rather a strategic evolution to create a well-structured and resilient workforce,” explains Bhiwapurkar.
“New positions continuously emerge, perpetuating a cycle where importance fluctuates cyclically. This dynamic nature of change, while challenging, is the constant that organisations navigate, rendering yesterday’s priorities obsolete and sometimes leading employees to leave”
Sriharsha Achar, CHRO, Star Health & Allied Insurance
Impact on employees
Quiet cutting, while aiming to avoid the abrupt shock of widespread layoffs, introduces a distinct set of challenges that can deeply affect employee well-being and outlook. An enduring consequence is the permeation of job insecurity within the workforce. Despite the gradual nature of this strategy, the ongoing erosion of positions cultivates a persistent unease among employees. This lingering uncertainty fuels concerns that their own roles may be next in line for elimination, subsequently diverting their attention from their tasks and compromising their overall engagement. Moreover, the impact of quiet cutting extends beyond the immediate job landscape, as it casts a shadow over employees’ growth prospects. The reduction in available positions for upward mobility creates a sense of stagnation in terms of career advancement.
Sriharsha Achar, CHRO, Star Health & Allied Insurance, is of the opinion that the strategy of quiet cutting diverges significantly from traditional employee approaches. It impacts companies in terms of implementation and workforce effect.
“Organisations have grappled with this strategy, witnessing shifts in role significance over a short span. Positions that were essential months ago may be placed on hold while others gain prominence.”
According to Achar, “New positions continuously emerge, perpetuating a cycle where importance fluctuates cyclically. This dynamic nature of change, while challenging, is the constant that organisations navigate, rendering yesterday’s priorities obsolete and sometimes leading employees to leave. Such shifts underscore the critical balance organisations must strike between adaptability and stability.”
“Maintaining transparency and involving employees in the decision-making processes is pivotal to preventing employees from feeling neglected. By fostering open dialogue, a collaborative solution was reached, resulting in employees volunteering for relocations to meet essential needs”
Emmanuel David, senior HR leader
Positive aspect: It results in flexibility and adaptability. Quiet cutting encourages organisations to become more adaptable to changing market conditions and technological advancements. By restructuring without causing immediate upheaval, companies can stay competitive in a rapidly evolving business landscape.
Negative aspect: It brings communication challenges. Companies often struggle to effectively communicate the rationale behind quiet cutting to employees. The lack of transparency can exacerbate feelings of mistrust and job insecurity among the workforce.
David proposes that maintaining transparency and involving employees in the decision-making processes is pivotal to preventing employees from feeling neglected. By fostering open dialogue, a collaborative solution was reached, resulting in employees volunteering for relocations to meet essential needs.
Organisations must find a balance between achieving operational efficiency and maintaining a positive work environment. Open communication, clear role redefinitions and efforts to address employees’ concerns are vital to mitigate the negative effects of quiet cutting and foster a more productive and harmonious workplace.