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PLAYBOOK FOR 2024: SOME COMPANIES ARE 'QUIET CUTTING' EMPLOYEES. HERE'S WHY THE
STRATEGY COULD BE COSTLY.

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While quiet cutting may seem like a path of least resistance, it carries risks
for businesses.
mathisworks via Getty Images
By Andy Medici – Senior Reporter, The Playbook, The Business Journals
Jan 4, 2024

Preview this article 1 min

As the job market softens, some companies are resulting to "quiet cutting."
Here's why the strategy could be costly for businesses.

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Editor's Note: This story is part of the Playbook for 2024 series — a
compilation of stories to help business owners navigate the evolving business
climate in the new year. Get more best practices for businesses at The
Playbook site and sign up for our weekly The Playbook newsletter for a regular
roundup of stories to help grow your business, advance your career and simplify
your professional life.

As the Great Resignation roared on, quiet quitting was bedeviling many
employers.

But nearly a quarter of business owners say they have engaged in “quiet
cutting,” in which they intentionally reassign employees to different or
lower-profile roles in hopes they quit on their own.

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It's a strategy likely to come into play more as the job market softens and
companies seek ways to trim costs amid economic uncertainty — but "quiet
cutting" is not without its risks or its critics.

While some employers may view quiet cutting as a low-conflict way to manage out
poor performers or reduce severance payouts, the strategy could be costly for
businesses, according to a new survey of business owners and workers by global
manufacturer Zetwerk.

The survey found 24% of business owners engaged in quiet cutting, with 73% of
them doing so for performance-management purposes.

Ultimately, only 39% of those employees ended up quitting and the company fired
34% of them. The survey found most employees would rather be fired than be "cut"
in this manner, but businesses who employ this tactic see it as the cheaper
option as well as a “path of least resistance,” according to Madeline Weirman, a
strategist for Zetwerk.

“In theory, it’s much more cost effective for a company when an employee quits
versus having to terminate someone and pay a severance," she said.

Additionally, Weirman said it also takes accountability off of the employer when
an employee leaves on their own — even though only 30% of surveyed business
owners viewed quiet cutting and more than half view it as unethical.

But in practice, the company also pays a steep price for quiet cutting,
according to the survey. It found 62% of workers who witnessed it felt
negatively toward their employer, while 50% said they felt betrayed by their
employer.

“This suggests that quiet cutting can erode trust and negatively affect the
morale of the remaining employees," Weirman said.

Among business owners who said they don’t engage in quiet cutting, the top
reason given was a belief in transparent communication with employees.

About 80% of respondents said offering severance was the more professional
approach. Despite doubts about the practice, 13% of the surveyed business owners
anticipated more quiet cutting by the end of the year.

Overall, 53% of workers who were "quietly cut" were entry-level employees. They
were assigned to less strategic, lower visibility or customer-support roles or
roles with non-traditional hours, according to the survey.

THE STATE OF THE JOB MARKET

Quiet cutting is occurring at a time when the hiring market is softening but
remains tighter than the prepandemic environment.

While most businesses plan to give employees raises next year, they aren’t
planning to give them to everybody. That finding comes from a new survey of 600
business leaders by ResumeBuilder.com, which found while 74% of companies plan
on giving raises next year, about half of those said they will give raises to
less than half of their employees. Only 14% of companies planning to offer
raises said they expect to give every employee a raise.

But a significant portion of workers are planning to ask for a raise before the
end of the year, and experts say a still-tight job market gives them leverage to
make that request.

“It is still a very, very competitive market for finding skilled talent. Things
may have cooled off a little bit, but when it comes to good talent, we aren’t
seeing it,” Emily Neill, a senior managing director for Robert Half’s executive
search division, recently told The Playbook. "Good talent is going to continue
to be in high demand.”

According to the 2024 Salary Guide from Robert Half, 63% of workers said they
plan to ask for a raise before the end of the year. Almost 40% pointed to higher
inflation as a reason for the raise while 26% said they took on more
responsibility and 16% said they felt underpaid. More than 30% of workers said
they would look for a new job if they did not get a raise.

“Many employees are feeling overworked and underpaid,” Neill said. “Individuals
are at a point where they are ready to ask for raises.”

Experts say companies ultimately will still need to step up their game to retain
employees over the long term, especially as the labor market is expected to
remain tight in the coming years due to demographic shifts and other factors.
That means focusing on pay transparency and making sure workers feel fairly
treated — and confident in the future of the company they work for, according to
additional Payscale research.

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