Employee Morale Plummets As Unemployment Rises And Job Market Weakens

Employee confidence hit a new low in February amid rising unemployment and a shaky job market.

New research reveals that employee confidence, based on workers’ trust in their employer’s business outlook, dropped to an all-time low in February.

Data from workplace review platform Glassdoor show that workers across various industries are increasingly worried about their future and losing confidence in the current job market, Axios reports. Factors contributing to the decline in employee morale include fear of layoffs, an unstable job market, and uncertainty about a company’s future, particularly in the federal sector.

As the Trump administration implements significant federal spending cuts, many workers are concerned about potential impacts. Confidence among these workers dropped nearly five percentage points last month, as the Department of Government Efficiency has “thrown the future of the federal workforce into disarray,” Glassdoor stated.

Federal workers experienced the largest drop in employee confidence, followed by the aerospace and defense sectors, which saw a 3.5% decline. This decrease reflects, in part, concerns about the spillover effects of federal budget cuts.

“It’s not just about people being laid off, but it’s also about people who are left behind and feel the impact,” said Glassdoor lead economist Daniel Zhao.

Key consumer sentiment indicators reveal growing concerns about a decline in economic confidence, fueling the “growth scare” topic that is dominating discussions among economists and investors. The New York Fed’s survey of consumer expectations shows that respondents anticipate tougher economic conditions in the near future.

Discussions of layoffs in Glassdoor reviews have been on the rise, with the percentage of reviews mentioning “layoff” increasing by 5% compared to the same period last year. This record low in confidence comes just three years after a record-high period when workers were in high demand, and job-hopping was more common.

“As the balance of risks has shifted from inflation to the job market, we’re seeing that reflected in how employees are talking about the risks and challenges they face,” Zhao said.