In Big Law, it is common for a person to be told they are not going to receive promotions — but will not be laid off or fired, Insider reported. They have already hit top-tier law firms, according to American Lawyer, which will likely continue as anxiety over a recession grows.
Law-focused outlets have been using the term and reporting on the phenomenon for years.
What is a “stealth layoff”?
According to Insider, a “stealth layoff” means you’ve been told that you’re not going to advance at the company, but you aren’t being fired, either.
When it comes to layoffs, employers usually pay a severance, and the news is met with unpleasant headlines. On Thursday, for example, Bloomberg reported Meta plans to cut budgets and restructure teams, as well as freeze hiring.
But one worker at a fancy law firm, only identified as O by Insider, said that during her January performance review, she was told she needed to find other work.
“They’re like: ‘No one’s unhappy with you. We’re just not gonna promote you,'” she told the outlet. O had only billed 1,600 hours that year. Lawyers can often bill hours into the 2,000s a year, especially at larger firms, and can work up to 100-hour weeks.
Why conduct a ‘stealth layoff’?
“Stealth layoffs” can be better for the firms and the employees, one expert told Insider.
The employee has time to job hunt without accruing a resume gap, and the (ideally) low-drama approach means the pair could work together again in some capacity, Karen Kaplowitz, New Ellis Group founder and business coach, told the outlet.
Employers typically do it when the economic situation is floundering. In 2020, Above The Law reported on “stealth layoffs” after the pandemic hit.