Workforce planning is taking a more cautious turn. A new survey of human resources leaders finds that nearly two-thirds expect their organizations to carry out layoffs during 2027. That expectation, while not a guarantee, marks a significant shift in sentiment among the people responsible for hiring, retention, and organizational design. After several years of tight labor markets and aggressive talent competition, many HR teams are now preparing for a period in which headcount reductions may become a more common tool for managing costs and restructuring priorities.

The findings do not suggest that every company will cut jobs, nor that all layoffs will be large. But the fact that so many HR leaders are planning for reductions indicates that business leaders are entering the new year with a more defensive posture. Economic uncertainty, pressure on operating margins, and the rapid adoption of automation are all contributing to a climate in which workforce adjustments are top of mind.

Confidence in growth is being replaced by caution

For much of the past decade, HR departments focused heavily on employee experience, retention bonuses, and creative perks designed to attract scarce talent. That playbook is not disappearing, but it is being supplemented by a more sober approach to headcount. When HR leaders anticipate layoffs, they often begin by reviewing contractor and contingent labor, pausing non-essential roles, and tightening approval processes for new requisitions. These early moves can slow hiring even before formal layoffs are announced.

The shift is visible in the language of workforce planning. More organizations are talking about “right-sizing,” “organizational efficiency,” and “redeployment” rather than uninterrupted growth. That does not mean every company is struggling. Some are simply preparing for a more volatile business environment, choosing to build flexibility into their cost structures now rather than react suddenly later. Layoffs, in this context, become a contingency that HR leaders want to be ready to execute cleanly and legally if conditions worsen.

Automation and AI are reshaping the conversation

Technology is another factor driving the change in tone. As companies deploy generative AI and automation across functions such as customer support, data entry, scheduling, and even parts of recruiting, some roles are being redefined faster than they can be replaced. HR leaders are not necessarily blaming AI for imminent job cuts, but they are factoring it into longer-term headcount models. A position that might have been refilled automatically two years ago may now be paused while leadership evaluates whether the work can be absorbed, automated, or combined with another role.

That places HR teams in a difficult position. They must maintain morale and trust among employees while simultaneously planning for reductions. Internal communication becomes critical. When workers sense that layoffs are possible, anxiety can rise quickly, especially in distributed teams where informal reassurance from managers is less frequent. HR leaders who are transparent about business conditions without making premature promises tend to preserve more trust than those who remain silent until the last moment.

Remote and hybrid workers may feel the uncertainty differently

For remote and hybrid employees, layoff anxiety can be amplified by physical distance. Without the casual hallway conversations and visible leadership presence that office workers experience, distributed employees may interpret radio silence as bad news. They may also worry that being out of sight makes them more vulnerable to being included in a reduction list. HR leaders who anticipate layoffs in 2027 need to pay particular attention to remote workers, ensuring that performance reviews, severance policies, and redeployment opportunities are communicated fairly across all locations.

At the same time, remote work can be part of an organization’s cost-saving strategy. Some companies that once invested heavily in office space are using flexible work arrangements to reduce real estate costs without cutting payroll. For those employers, preserving remote or hybrid roles may actually help avoid layoffs or reduce their scale. The relationship between remote work and job security is therefore not simple: in some cases flexibility protects jobs, while in others it adds to workers’ sense of isolation during difficult periods.

For employers, the priority should be consistency. If layoffs do occur, they should not disproportionately affect remote staff without a clear business reason. Clear documentation, objective performance criteria, and structured redeployment conversations are especially important when employees cannot gather in a single room to hear the news.

As organizations plan for a potentially tougher 2027, the role of HR is shifting from growth cheerleader to strategic risk manager. That does not mean abandoning employee well-being. It means pairing hard decisions with clear communication and fair processes. For companies with distributed teams, tools that support flexible staffing and redeployment can help leaders move talent into new roles rather than out the door. XMF, for instance, is designed to help remote-first organizations manage flexible work arrangements as staffing needs change.

Originally published by XMF, inspired by publicly reported industry news.