You’ve Heard of Quiet Quitting. Now Companies Are Quiet Cutting.
Layoffs are down, but employers are still finding ways to cut jobs
Layoffs are down, but employers are still finding ways to cut jobs
Workers are waking up to emails and team-meeting requests with a jarring message: They aren’t fired, but their jobs are gone.
People on the receiving end of these memos describe running through a range of emotions, from relief that they’re still employed to a sense of dread that their bosses secretly want them to leave. They are also facing a labor market that isn’t as robust as a year ago, leaving many to believe that the best option is to stay put and hunt internally for a better fit.
Adidas, Adobe, IBM and Salesforce, among others, have reassigned employees as part of corporate restructurings. Mentions of reassignment, or similar terms, during company earnings calls more than tripled between last August and this month, according to data from AlphaSense, a financial-research platform.
“Reassigning is definitely a huge part of the dynamic right now,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm.
For companies that spent several years—and significant money—to hire top talent, reassigning workers to new roles can be a way to fill jobs vital to future plans while trimming costs associated with old strategies, say human-resources executives.
It can also be a waiting game. Employees to whom it would be costly to pay severance or months of unemployment benefits might decide to leave on their own if they feel stuck in a job they don’t want, executive coaches say.
U.S.-based companies announced 42% fewer job cuts in July than they did in June, Challenger said. July job cuts were also 8% lower than the prior-year period, marking the first time this year that monthly job cuts were lower than in 2022.
In interviews and online forums, many workers said they worried whether their reassignment meant they would eventually be pushed out the door. They also wondered how to work their way out of job purgatory and back into a position they actually want.
“I got the sense that it was like: ‘We appreciate everything you did so we didn’t lay you off, so you can either make the best of this or go find another job somewhere else,’ ” said Matt Conrad, a 34-year-old senior sales-enablement specialist at IBM who went through two reassignments in two years before landing his current role last fall.
In Conrad’s first reassignment in 2021, a manager scheduled a call to notify him that his manager role was eliminated. He was given a new job selling software he had no experience with, a move he said took a toll on his mental health.
Later that year, Conrad found a new job at IBM through a former manager that was better suited to his skill set. Then, in January 2022, that team was eliminated and he was reassigned again. Conrad asked the HR department to help him to find his remote, senior sales-coach role, a process that took six months.
Not quitting when he was reassigned was a matter of principle, he said: “I wouldn’t give in because I was a top performer and it just wasn’t fair.”
IBM didn’t respond to requests for comment.
Getting caught up in a reorganisation can create anxiety for workers, but it’s sometimes a genuine move on the company’s part to avoid letting people go, said Roberta Matuson, an executive coach and adviser to businesses including General Motors and Microsoft on human-resources issues.
“They’re basically signalling to you: ‘Look, this is the only way for me to have a job here for you, I need to reassign you, so wink, wink, if I were you, I would take the assignment,’ ” she said.
Other times, workers are purposefully pushed into jobs management knows they will be miserable in, prompting them to quit.
“They could be putting you out to pasture,” Matuson said.
Signals to look for include reassignment to a job that is far below the pay or skill level you currently have, Matuson said. Other warning signs: Being offered a role that requires relocating when your boss knows moving isn’t a viable option for you, or being reassigned to a division that’s rumoured to be on the chopping block.
Employees suspicious or nervous about a reassignment should ask their managers why, specifically, it’s happening and what the reassignment means for their career path, said Naomi Sutherland, a global lead of talent development with Korn Ferry, a consulting firm. The answers could reveal whether a job transfer is personal.
Without good information, “people are going to fill a void of information with whatever story they’re going to tell themselves,” she said.
Most of the time, there is little legal recourse for workers if their company reassigns them, employment lawyers say.
One exception is when a worker can demonstrate the reassignment was retaliatory, said Angela L. Walker, an employment attorney with Blanchard & Walker in Ann Arbor, Mich. The bar is high, she added. The employee would have to show prior evidence of discriminatory treatment or that they were unfairly singled out.
“I’ve seen lots of examples in my practice where employees are told they’re being let go in a ‘restructuring’ and it turns out that they’re the only one affected, or they’re the only one affected in their group,” Walker said.
Grant Gurewitz, 32, said it took time to adjust to a new role in Seattle earlier this year when his software company eliminated his position as head of growth marketing for employee experience in North America. He was given 24 hours to make a choice between two other jobs, or leave. He picked a global head of growth marketing role that came with more responsibilities but without a pay increase.
He chose to look on the bright side, because a global role probably would’ve been the next position he wanted and it builds on his existing skill set.
“There’s still a lot of runway for me to learn and grow and develop in this role, which is the glass-half-full approach to all of this that’s happened,” he said.
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When will Berkshire Hathaway stop selling Bank of America stock?
Berkshire began liquidating its big stake in the banking company in mid-July—and has already unloaded about 15% of its interest. The selling has been fairly aggressive and has totaled about $6 billion. (Berkshire still holds 883 million shares, an 11.3% interest worth $35 billion based on its most recent filing on Aug. 30.)
The selling has prompted speculation about when CEO Warren Buffett, who oversees Berkshire’s $300 billion equity portfolio, will stop. The sales have depressed Bank of America stock, which has underperformed peers since Berkshire began its sell program. The stock closed down 0.9% Thursday at $40.14.
It’s possible that Berkshire will stop selling when the stake drops to 700 million shares. Taxes and history would be the reasons why.
Berkshire accumulated its Bank of America stake in two stages—and at vastly different prices. Berkshire’s initial stake came in 2017 , when it swapped $5 billion of Bank of America preferred stock for 700 million shares of common stock via warrants it received as part of the original preferred investment in 2011.
Berkshire got a sweet deal in that 2011 transaction. At the time, Bank of America was looking for a Buffett imprimatur—and the bank’s stock price was weak and under $10 a share.
Berkshire paid about $7 a share for that initial stake of 700 million common shares. The rest of the Berkshire stake, more than 300 million shares, was mostly purchased in 2018 at around $30 a share.
With Bank of America stock currently trading around $40, Berkshire faces a high tax burden from selling shares from the original stake of 700 million shares, given the low cost basis, and a much lighter tax hit from unloading the rest. Berkshire is subject to corporate taxes—an estimated 25% including local taxes—on gains on any sales of stock. The tax bite is stark.
Berkshire might own $2 to $3 a share in taxes on sales of high-cost stock and $8 a share on low-cost stock purchased for $7 a share.
New York tax expert Robert Willens says corporations, like individuals, can specify the particular lots when they sell stock with multiple cost levels.
“If stock is held in the custody of a broker, an adequate identification is made if the taxpayer specifies to the broker having custody of the stock the particular stock to be sold and, within a reasonable time thereafter, confirmation of such specification is set forth in a written document from the broker,” Willens told Barron’s in an email.
He assumes that Berkshire will identify the high-cost Bank of America stock for the recent sales to minimize its tax liability.
If sellers don’t specify, they generally are subject to “first in, first out,” or FIFO, accounting, meaning that the stock bought first would be subject to any tax on gains.
Buffett tends to be tax-averse—and that may prompt him to keep the original stake of 700 million shares. He could also mull any loyalty he may feel toward Bank of America CEO Brian Moynihan , whom Buffett has praised in the past.
Another reason for Berkshire to hold Bank of America is that it’s the company’s only big equity holding among traditional banks after selling shares of U.S. Bancorp , Bank of New York Mellon , JPMorgan Chase , and Wells Fargo in recent years.
Buffett, however, often eliminates stock holdings after he begins selling them down, as he did with the other bank stocks. Berkshire does retain a smaller stake of about $3 billion in Citigroup.
There could be a new filing on sales of Bank of America stock by Berkshire on Thursday evening. It has been three business days since the last one.
Berkshire must file within two business days of any sales of Bank of America stock since it owns more than 10%. The conglomerate will need to get its stake under about 777 million shares, about 100 million below the current level, before it can avoid the two-day filing rule.
It should be said that taxes haven’t deterred Buffett from selling over half of Berkshire’s stake in Apple this year—an estimated $85 billion or more of stock. Barron’s has estimated that Berkshire may owe $15 billion on the bulk of the sales that occurred in the second quarter.
Berkshire now holds 400 million shares of Apple and Barron’s has argued that Buffett may be finished reducing the Apple stake at that round number, which is the same number of shares that Berkshire has held in Coca-Cola for more than two decades.
Buffett may like round numbers—and 700 million could be just the right figure for Bank of America.
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