Quiet Cutting: Workers Are Being Reassigned Instead of Let Go
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This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Friday, September 1st. I'm J.R. Whelan for The Wall Street Journal. More and more workers are getting the call that their company is going through some staffing changes. But they're not losing their job.
Instead, they're being reassigned. It's a range of emotions. The people that I talked to said they had everything from relief that at least they weren't laid off and they still had a job to anger. They were just angry that they had no say in where they were going and what they were being told to do, basically told to do or else.
We'll talk with our reporter Ray Smith about this current trend in corporate America. Call it quiet cutting. That's after the break.
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
As many companies re-examine their staffing, the good news is they're not laying off employees.
What is 'quiet cutting' and why are companies reassigning employees instead of laying them off?
But the bad news is they're offering workers a chance to stay, but reassigning them to less than ideal positions. Wall Street Journal reporter Ray Smith joins me. So, Ray, first of all, what do we mean by reassigning employees?
It basically means alerting an employee that their old role has been eliminated and that they will now be moved into a different role. one that's not of their choosing. And if they don't take the reassignment, they don't have any option but to leave.
So it sounds like the employees don't have much say in this.
They don't have any say in it except to whether they are taking the assignment or they are declining it. And if they're declining it, they don't have another job offered.
Now, this idea of reassigning employees, is this something new?
It's not something new. Involuntary reassignments have been a way for companies to move people, for instance, to growing parts of the business from slower growing parts of the business. It's happening now in large part because of the uncertain economy and businesses are really trying to cut costs. And if they turn to layoffs, they have to pay severance costs. So that's a big expense. It can be thousands of dollars per person. And so reassigning people is a way to save on having to pay those severance costs. Businesses are also trying to retain people as well if they're putting them in other spots because it costs them more to hire somebody and train them and onboard them. Some of this is due to the changing labor market as well.
The job market is still relatively tight, but not as tight as it was a year or two ago. And so for some of these employees, they're staying put because they really are nervous that they won't be able to find a new job as quickly. And companies know this.
So how are workers being affected by this? By not being fired, but then being boxed into a role they might not like?
As you can imagine, it's probably, you know, it's a range of emotions. The people that I talked to said they had everything from relief that at least they weren't laid off and they still had a job to anger. They were just angry that they had no say in where they were going and what they were being told to do, basically told to do or else. Some people had dread that the company was sort of sending them some kind of message about what they truly think of them. People said it took a toll on their mental health even. There's confusion because sometimes people are thrown into roles where they don't even have the kind of expertise that role requires, but they're expected to sort of sink or swim and they end up floundering.
So it can really do a number on one's self-esteem. You know, some people do accept it and they're grateful to still be employed.
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