Research suggests a company’s culture takes about seven months to recover from a round of cuts. This year, many companies are cutting again before that recovery is over.
This week’s layoff coverage focused on the people who lost their jobs: 268 at Xbox, 13,000 over a year at Novo, a warning of a “much smaller” legal department at Disney. The people left behind got less attention, even though they are the ones who have to carry the company’s culture forward. Increasingly, they are doing it between rounds of cuts rather than after them.
The recovery clock
Layoffs don’t only remove people. They change how the people who remain behave. Research from outplacement firm Careerminds found that layoffs disrupt a company’s culture for 7.2 months or longer, and that trust in leadership, trust in direct managers and confidence in the company’s future were still down 10.3 percent even after partially recovering. The same report cited Harvard Business Review findings that companies see a 20 percent drop in job performance, a 41 percent drop in job satisfaction and a 31 percent rise in voluntary turnover among the employees who stay.
Seven months is a recovery window. Look at the calendar of this year’s cuts and it’s clear many workers never get to the end of it. Disney cut jobs in April and July, and its legal chief warned his department in September of more to come. Xbox announced a 3,200-person reduction in July and carried out its latest round this week, with about a quarter of the plan still ahead. Citigroup has spent the year working toward 20,000 eliminations. At companies like these, the period between rounds is shorter than the time it takes culture to recover.
That changes the nature of the problem. A single layoff is a shock that organizations can recover from. Rolling layoffs create a lasting condition in which employees stay braced for the next round.
What the people who stay are carrying
The research on surviving employees is consistent. A 2026 LHH study of 3,000 HR leaders and more than 8,000 employees in seven countries found that 73 percent of workers had seen teammates laid off in the past year. The top effects reported on those who remained were heavier workloads, lower morale, instability, lost trust in leadership and lower productivity. Fifty-six percent said they were questioning their own relevance.
The extra work is often unpaid. In a Careerminds survey of 900 U.S. professionals, 32.6 percent said their workload increased significantly after layoffs, and another 42.4 percent said it increased slightly. Of those who took on more, 80.8 percent received no raise.
The broader numbers are moving the same way. The American Psychological Association‘s 2026 Work in America survey found fewer workers describing their workplace as healthy (80 percent, down from 85 percent in 2025) and fewer feeling valued at work (80 percent, down from 84 percent). Significantly more workers reported feeling tense or stressed during the workday. Gallup’s latest global report found employee engagement fell to 20 percent in 2025, its lowest level since the pandemic and the first back-to-back annual decline in the survey’s history.
Managers are delivering the cuts and absorbing them
The group caught in the middle is managers. They are asked to deliver bad news, redistribute the work and keep remaining teams motivated, while often facing cuts themselves. Gallup found that managers had the sharpest drop in engagement, down five points in a single year. Xbox’s cuts this week specifically targeted the Xbox Game Studios management and central functions layer.
That matters because managers are how most employees experience culture day to day. When the people responsible for rebuilding trust are also worried about their own jobs, recovery becomes harder.
Companies say they’re helping. Workers mostly don’t see it.
The LHH research found a wide gap between what employers think they are offering and what employees experience. Seventy-seven percent of HR leaders said they offer targeted redeployment and mobility programs, but only 19 percent of employees said they experience or recognize them. The report concluded that layoffs are no longer exceptional events but a recurring result of constant workforce pressure, and that companies treating each round as a one-off face compounding costs, including rehiring at a premium and further erosion of trust.
The culture that forms between rounds
When cuts become routine, employees adapt. They stay quiet in meetings, avoid taking risks and treat their jobs as temporary even when they aren’t leaving. These are reasonable responses to uncertainty, and they are also the opposite of the collaboration and innovation executives say they want from the smaller, AI-enabled workforces they are building.
The question for companies isn’t whether they can make culture survive a layoff. It’s whether they can build a culture that works when the next round is always possible. So far, the data suggests most haven’t figured out how, and the people who stay are paying for that.
Sources: CFO.com, LHH, Morningstar (LHH release), Innovative Human Capital (Careerminds), American Psychological Association, Senior Executive (Gallup), Deadline, Xbox Wire, OPB, Startup Fortune