Quiet cutting: the mental health impact 

In recognition of Mental Health Awareness Week, which runs from May 12th to May 18th in 2025, Careerminds is investigating how HR teams can lead with integrity through periods of uncertainty. In this first in a series of three articles, we’re looking at the phenomenon of quiet cutting, and how it can impact mental health. 

Quiet cutting is essentially a workforce reduction strategy. Whilst controversial, it is a legal and recognised method of reducing costs by reducing headcount. It involves reassigning workers to other positions within the business, without giving them a choice in the process. 

Companies can benefit from this strategy as the employee may then quit the business voluntarily, either because they don’t want the new role, because they don’t enjoy it when they take it, or because they feel insecure within the business. As a result, the company loses the employee without having to pay costly retrenchment benefits.

Examples include: 

• Reallocating workers to roles unrelated to the one they were originally hired to do
• Reassigning a colleague to a less prestigious role
• Demanding that remote employees return to the office or face limited career progression opportunities 

In a challenging job market, employees may choose to take the reassigned role rather than quitting immediately, to ensure continuity of employment while they search for a new position. During this transition period, their mental health and productivity may suffer – affecting other colleagues along the way. 

However, companies continue to use this approach, trading short-term wins for long-term damage, with the rationale that: 

• They can avoid paying severance packages
• They can avoid the negative publicity associated with mass layoffs
• They can reframe awkward retrenchment conversations as solutions to unemployment

Research shows that there are very few benefits for employees who have been quietly cut – and that’s not surprising, as they didn’t choose the path they’re being forced down. However, a Zetwerk survey revealed that 57% of quietly cut employees learned a new skill, 15% were promoted, and 9% received a raise! 

For the majority of employees, though, the experience of being quietly cut is not a pleasant experience, or one they’d care to repeat. In fact, 56% said they’d rather be fired outright!

While the company can gain immediate cost savings through quiet cutting, the strategy presents several challenges for HR teams. They have a huge responsibility to both employees and the business, and can feel stuck in the middle of this messy – but supposedly necessary – process. 

These are just some of the challenges that quiet cutting employees poses for HR teams: 

• Trust: Employees, whether reassigned or not, may lose trust in the business as they are presented with a “take it or leave it” option that affects their entire career.
• Morale: Instability can negatively impact employee morale, resulting in lower productivity across the board.
• Reputation: The Zetwerk survey revealed that 8% of quietly cut employees left a negative company review after the experience and 62% who saw employees quietly cut said it made them feel negatively toward their employer.
• Integrity: Quiet cutting runs against popular company values statements that prioritise transparency and ethics – it’s seen as a backhanded tactic.
• Legal issues: While quiet cutting is legal, HR teams may open themselves up to constructive dismissal cases.
• Long-term attraction and retention: Employee distrust and poor company reviews make it harder to ensure the company secures the best talent in the future.
• Mental health: With identity being so tied to job titles and with bills to pay, the impact of quiet cutting on employee mental health can’t be underestimated – we’ll look into this in more detail below.

Despite these challenges, quiet cutting remains a popular downsizing strategy – one third of respondents to the Zetwerk survey reported experiencing quiet cutting, and nearly one in four business owners admit to practicing it. 

Quiet cutting can have a detrimental effect on employee mental health – particularly when their reassignment involves demotion, less prestige, or lower pay. The strategy can breed distrust, anger, resentment, and betrayal. 

Those keen to retain a role – any role – rather than face unemployment can become subject to self-doubt, burnout, and overwhelm. They may feel worthless, rejected, or excluded, which can negatively impact performance and attendance. The psychological effect of being set up to fail drives up stress and anxiety. 

The mental toll on HR colleagues must also be considered – as the team tasked with implementing this strategy, they’re in the firing line for complaints and legal action, on top of the emotional stress of delivering bad news. 

Poor mental health is one of the less obvious impacts of quiet cutting, meaning that employees aren’t just leaving because they don’t like their reassignment – they’re being forced out due to underperformance, increased absence, and a toxic environment. 

The negative impact of quiet cutting on both the business and its employees is clear – and it’s often HR teams that are caught in the cross-fire. On one hand they’re being told to cut costs, on the other hand they need to protect long-term attraction, retention, and performance. Cutting across that is the moral and ethical requirement to protect the mental health of individuals. 

Solutions must be led by honest and open communication. When the reputation of the business and the mental health of its workforce is at stake, transparency is key. 

There are several strategies that businesses can use to downsize the workforce, without resorting to quiet cutting: 

• Voluntary redundancies 
• Hiring freezes
• Furloughs
• Temporary reductions in pay or hours 
• Offering outplacement services

It must be remembered that the costs associated with retrenchment or outplacement can be significantly less than the costs associated with low employee morale, reduced engagement, reputational damage, and lower productivity. 

To support employees and HR teams through periods of transition, Careerminds offers outplacement services that soften the impact. When workforce reductions are necessary, Careerminds partners with your business to protect its reputation, whilst supporting the mental health of your staff.

Our career coaches are able to support participants through the emotional and mental load that comes with unexpected change, keeping them positive, motivated, and moving forward. With rebuilt confidence, a strong personal brand, and faith that their employer has supported them through a challenging time, outplacement achieves positive outcomes for the business and affected employees.

While not illegal, quiet cutting is considered unethical and can have lasting, long-term repercussions on both business reputation and employee mental health. To avoid the negative consequences of quiet cutting, businesses should consider alternative strategies, focus on open communication, and think about the benefits of offering outplacement services as part of the overall workforce reduction strategy. 

Contact Careerminds today to find out if we’re the right outplacement provider to support your business.

Jen David

Jen is a careers writer and CV specialist, with many years’ experience writing for leading careers platforms and her own business, CV Shed. She loves to support job seekers in progressing their careers, whether they’re looking to step up the ladder, take a sideways move, or change career entirely. She writes attention-grabbing CVs that show off her clients’ expertise and their value to a business, helping them to secure new roles quickly.

Jen also writes SEO blog content on a wide range of careers topics, for clients in the UK, US, Singapore and Australia. She has produced over 300 articles to date and also edits the work of other writers. She maintains her own blog to support job-seekers with up-to-date, best practice information on CVs, LinkedIn profiles and other related topics, and has a book available on Amazon Kindle, How to write a CV for the modern job market.