Companies lean into ‘quiet cutting’

Erica Carbajal

Companies are avoiding hard layoffs but still cutting jobs by reassigning employees to different roles — a trend dubbed “quiet cutting,” The Wall Street Journal reported Aug. 27.

From August 2022 to August 2023, mentions of “reassignment” or similar phrasing during company earnings calls more than tripled, according to data from financial research platform Alphasense. Companies that have embraced large-scale reassignments include Adidas, IBM, Adobe and Salesforce. In healthcare, at least 20 health systems have announced changes to executive ranks and leadership teams this year.

“Reassigning is definitely a huge part of the dynamic right now,” Andy Challenger, senior vice president at executive coaching firm Challenger, Gray & Christmas told the Journal.

Reassignments can be a strategic way for companies to cut costs by placing top talent — that they previously spent significant amounts of money on to recruit — in new roles that are better suited to help them meet future organizational goals. In many cases, reassignments could be a way for companies to avoid letting people go. On the other hand, it could be a soft nudge to get employees to quit, executive coaches and advisers told the Journal.

“They could be putting you out to pasture,” said Roberta Matuson, executive coach and adviser on human resources matters to businesses such as General Motors and Microsoft.

For employees to gauge whether a reassignment is a genuine move to avoid letting them go or a subtle push out the door, experts said they should consider whether the reassigned role is far below the pay and experience level of their original job, and whether the reassignment requires a big move when their employer knows relocation is not a realistic option, according to the Journal.