Employers have regained their power over employees, and the effects are already showing.
At the peak of mass resignations in November 2021, 4.5 million workers left their jobs voluntarily. As of last month, that number was about 3 million as workers hesitate to quit at a time when job searches can drag on for months. According to a report by the Federal Reserve Bank of New York, optimism among workers looking for work during the pandemic in 2020 is low today.
Data from the Federal Reserve Bank of New York found that workers are even less optimistic about finding work today than they were in 2020. Fed data shows that the average worker has less than a 50% chance of finding a job in today’s economy.
As AI advances and investors pressure companies to cut costs, even those with jobs now face cuts in benefits and perks without massive layoffs. Many are forcing employees to return to the office after years of flexible work and remote-work policies.
According to MyPerfectResume’s January survey, employees who couldn’t tolerate such cuts in the past are now facing them.
A survey of 1,000 adults found that 7% of employees would quit their job because of a mandatory back-to-office policy. That’s compared to 51% who said they would quit on the same issue in January 2025. More than 70% of workers also predict they will push for flexible work policies or have less bargaining power in 2026 than in 2025, the survey found.
“The era of employee leverage is over,” said Jasmine Escalera, career expert at MyPerfectResume, in a statement.
One of the most important reminders that the workplace has changed is the shift in companies’ approach to remote work. A July report by commercial real estate company Johns Lang LaSalle Inc. (JLL) found that Fortune 100 companies are forcing employees to work from the office, an average of 3.8 days per work week compared to 2.6 days in 2023.
Some employers have gone even further, forcing employees to come into the office full-time and moving away from pandemic-era flexible work policies.
One such company is Instagram, whose CEO Adam Mosseri said in a company-wide memo in December that US employees are required to work from the office five days a week. Parent company Meta has made it mandatory for employees to come to the office three days a week since 2023.
Automaker Stellar last month began requiring workers to come to the office five days a week. Meanwhile, in January Home Depot announced five days back in the office for employees earlier this month, at the same time it announced 800 layoffs.
Even Microsoft, which, after the pandemic, instituted a flexible work policy that allowed many employees to work remotely for less than 50% of the week without a manager’s approval, required its workers in the Puget Sound region to come into the office three days a week in February.
The rollbacks that companies are pushing in today’s economy have also expanded into benefits and perks. In February, Home Depot implemented stricter requirements for employee bonuses. A manager must now reach at least 95% of his store’s sales target to qualify for a bonus, up from 90% previously. At the same time, the retailer cut the amount paid to those who reached the minimum threshold. Managers whose stores reach 95% of their sales target, and no more, will receive 25% of their target bonus, down from 50% previously. The changes come as the home improvement retailer fell short of analyst expectations with sales of $38.2 billion, down $1.5 billion year over year.
Meta, whose CEO, Mark Zuckerberg, has been one of the loudest voices calling for cost cutting and efficiency, has scaled back some benefits for workers in recent years. Some of these changes include eliminating free laundry and dry cleaning, as well as pushing back the time that dinner is served in the office, so employees have to stay up later to take advantage of it. Goldman Sachs, for its part, is cutting its free breakfast and lunch options, according to it The Wall Street Journal.
Companies’ cuts to allowances and benefits, as well as their push to get more from employees, come as unemployment stood at 4.3% in March. Potentially as a result of high unemployment and low recruitment, the total dropout rate has been below 2% for eight consecutive months.
March added 178,000 jobs, beating analysts’ expectations, but a month earlier, the U.S. economy lost 92,000 jobs, according to the Bureau of Labor Statistics.
Nicholas Bloom, a Stanford economist whose research helped define the Great Recession, said. fate Last month workers should not leave their current job without making another line. “You don’t want to quit a job to find out that what you thought was easy — to get another job — turns out to be a huge struggle,” he said.
AI adoption is adding another layer of pressure. While AI is saving employees up to an hour per day, according to Goldman Sachs, companies are quickly making up for this saved time with additional tasks, demanding more output from each worker.
Jamie Shapiro, an organizational psychologist and CEO of executive coaching company Connected EC, said. fate When employers push for greater productivity, they may be underestimating the long-term cost to employees and the company as a whole.
That’s especially true if cuts in benefits or allowances aren’t met evenly, she said, and in those situations, employers need to make sure they clearly communicate the reasons for the changes.
“When we have justice friction, we will see less motivation of our employees because we want things to feel fair.”
She argued that the idea that squeezing workers harder would generate more output is wrong.
“When we don’t invest in our people, and don’t care about their well-being, we actually get very little out of them.”
The Great Resignation shows that employees who have been offered a better deal elsewhere do not hesitate to move on. That’s a problem for companies, especially when the average cost per employee turnover is six to nine months of an employee’s salary, according to a study by the Society for Human Resource Management.
Employees who are constantly worried about the next layoff or benefit cut won’t be loyal to their employers or brag about their company to their peers, which can help recruiting and the company’s brand.
Improving perceptions of a company’s employees and the amount of effort they contribute to the organization is related to the company’s workplace culture, Shapiro said.
“When I’m someone on the front lines, do I feel like my organization is being fair to me? And if the answer is no, then it can hurt motivation, and it can not only hurt the culture, but it also hurts how invested I feel in the organization,” she said.
This story was originally featured on Fortune.com
