Layoff Boomerangs: Pay Attention To This $19M Mistake

Major companies are announcing massive layoffs this year. We're confident many are going to regret some of these decisions.

Here’s what they’re missing: New research from Visier shows that about 5.3% of laid-off employees are eventually rehired by the same company that let them go. We call these "layoff boomerangs," and they carry a hefty cost.

The layoff boomerang truth: This isn't guesswork, it's fact

The value and power of this data is that it is not survey data. This isn’t Visier asking HR leaders, “Do you think you're hiring people back?” and they say, “I guess so.” This is actual data that we see based on companies’ actual rehiring statistics.

Visier's analysis looked at 2.4 million employees across 142 enterprise organizations globally. The data shows a clear pattern: organizations have always rehired staff they previously laid off. And sometimes, not too long after they were let go. 

Why does this happen? Companies sometimes find themselves in a position where they’ve  laid off too many people at any one time and later realized, “Oh, actually, we let too many go. Can we get them back?”  

Your takeaway: It’s important to consider the very real likelihood that someone you lay off today may be needed back on the job in the not-too-distant future. Don’t trade potential short-term gains for long-term costs.  

The DNA of layoff boomerangs

Visier research found three groups of laid-off employees get hit hardest, and that are rehired most often:

• High performers have a  120% higher rehire rate than mid and low performers.

• Mid-tenured employees (10-15 years) have a 42% higher rehire rate than other tenure groups.

• Managers had a 68% higher rehiring rate than individual contributors.

Organizations need to pay close attention to these three groups and exercise caution about letting them go. They’re statistically more likely to be needed later. In some cases, this may go against common wisdom.

Consider the ongoing conversations about flattening organizations. There’s a sense that managers aren’t needed in the age of AI. But our Visier research shows that managers are still needed, because organizations end up rehiring a lot more of them than non-managers.

Your takeaway: Be cautious when including members of these groups in layoff plans. Think about possible layoff alternatives like reduced hours, temporary pay adjustments, or role modifications.

Failure to identify high performers

So why do high performers keep getting cut? The answer is actually quite troubling. What we’re seeing is that some managers are not really taking the time to consider individual employees and their contributions.  

Without good data at their fingertips, managers fall back on gut feel. Years back, when I interviewed non customer organizations over executive layoff decision making, I learned that in the absence of data, managers are forced to list all employees on a spreadsheet and then make a tick mark by those who should stay and an “x” by those who shouldn’t. But again, without good data on employees’ performance and engagement, these decisions are often based on things like: “Well, Jo took two months off last year for being sick,” or “Sofia goes home at five every day to take care of kids.”  

Employee’s actual role and importance in the team, their output, performance, and productivity, as well as their collaboration behaviors and commitment and engagement in their work should be criteria to inform any decision. Managers should be able to have data at their fingertips to review employee performance data, including feedback and a thorough examination of explicit skills, tenure and other important informative metrics. 

Your takeaway: Gut-feel isn’t reliable. Make sure to incorporate actual performance data and skills information when these decisions are being made, not just names on a list or one-off behaviors 

The math doesn't lie: Layoff boomerangs are costly

On average, boomerang employees return in just under six months; most come back within 10 months. When they do return, they earn more: a 5% pay increase compared to 2% for colleagues who stayed.

Let's calculate what this looks like. Suppose in the finance industry, 83,000 people were let go in 2024. At a rehiring rate of 7.5%, you're rehiring about 6,000 people. At an average salary of $100,000 and a premium of 3%, it costs the finance industry an additional $19 million.

That's just direct costs. It doesn't include severance, lost productivity, turnover contagion, or the hit to morale when remaining employees watch colleagues get cut and called back.

Your takeaway: When finance and HR share the potential layoff "savings," insist they include a rehiring scenario. The numbers look very different when you account for the boomerang effect. No one can predict the future, so plan for all scenarios. 

Reduce layoff boomerangs: Core HR metrics to track 

When considering reductions in force, organizations and their HR leaders should ask: "Do we have a system in place that allows us to track your involuntary turnover?" "What about tracking our boomerangs?” 

We recommend organizations track these metrics on an ongoing basis:

• Involuntary turnover and reductions in force 

  • Know exactly how many people you're letting go.

• Hiring rates, including rehiring rates 

  • Track how many laid-off employees come back.

• Performance metrics 

  • Make sure you know who your high performers are before making recommendations for layoffs.

• Compensation changes

  • Compare pay for boomerangs versus employees who stayed.

• Business impact

  • Connect layoffs to project delays and goal achievement.

Your takeaway: These metrics shouldn't live in a one-off report. Build a dashboard that's ready whenever leaders start talking about headcount reductions. 

When it comes to layoffs, think before you act 

On the surface, 5% may not seem like a significant number. But it’s important to think it through to quantify the potential impact on your organization. How many employees is that in any given year? Is it 100? Is it 1,000? In letting people go, you're disrupting their careers. You're causing discontent, disengagement, and potential turnover contagion. Be thoughtful in your analysis and your decisions.

The question isn't whether layoffs are ever necessary. Sometimes they are. The question is whether you're making those decisions with complete information, and with strategies in place to avoid expensive mistakes you'll need to reverse six months later.

Before your next workforce reduction, understand the real cost of layoff boomerangs. Download the full report to learn which employees are most likely to be rehired and how to plan smarter.