Get All Access for $5/mo

'Stealth Layoffs' Reportedly Set To Increase As Recession Fears Grow "Big Law" doesn't lay you off, exactly.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Fairfax Media | Getty Images
Businessman with laptop.

Maybe you've quiet quit, or have been quit fired, but now there's a new way for workplaces to get weird: "stealth layoffs."

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.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Science & Technology

Use This Framework to Successfully Integrate AI Into Your Business Operations

Here's how to ensure both innovation and compliance when using AI in your organization.

Growing a Business

5 Effective Strategies to Boost Your Business's Online Presence

Boosting your online presence in 2025 is the key to success for businesses looking to grow. Working on your branding and reputation management is important to drive more sales and improve conversion.

Growing a Business

Why Business Owners Should Streamline Their Operations Now for Success in 2025

As the holiday season and year-end approach, business owners face heightened operational demands, from inventory management to spend control. By streamlining these processes and partnering with flexible suppliers, businesses can maintain efficiency, meet customer needs and focus on growth while navigating this busy period.

Marketing

He Pitched His First Business at 12 and Sold a Company for 8 Figures When He Was 23. Here's This Gen Z Marketing Expert's Next Big Move.

Griffin Haddrill built a marketing empire working with artists like Justin Bieber and Lil Nas X. Learn how he tapped into Gen Z's digital culture and turned viral campaigns into a business model.

Business News

Apple Is Adding ChatGPT to iPhones This Week. Here's How It Works.

ChatGPT will take over questions that Siri can't answer.