The Psychological Aftermath of Layoffs: Understanding the Hidden Costs Behind Corporate Restructuring

2025 feels like the year the floor dropped out from under India’s white-collar workforce. Walk into any tech park in Bengaluru or Hyderabad right now and you’ll hear the same uneasy whispers, Who’s next? Target quietly let go of 150 employees from its Global Capability Centre in Bengaluru, part of a worldwide cut that erased 1,800 corporate roles. Amazon’s move was even more brutal: 14,000 jobs gone globally, and plenty of those pink slips landed right here in India. I’ve spoken to a few engineers who barely had a day’s notice before being locked out of their systems. Imagine: one week you’re leading a sprint review, and the next, your access badge doesn’t work.

Even the mighty TCS trimmed roughly 12,000 people, mostly seasoned professionals, people who once trained the freshers now taking their seats. They called it “skill realignment.” I call it a corporate euphemism for obsolescence. The industry’s new obsession with automation and “lean structures” sounds efficient on paper, but it’s gutting middle management and hollowing out the human side of business (India Today, 2025). The data says over 50,000 tech jobs could vanish this year (Business Standard, 2025), but data doesn’t capture the tension in a father’s voice when he tells his kids he might have to move back to his hometown.

Watching this unfold, I’m less worried about GDP charts and more about the quiet collapse happening inside living rooms across the country, the loss of purpose, dignity, and identity that no severance check can replace. Layoffs don’t just restructure companies. They restructure people.

The human brain hates chaos; it craves patterns, predictability, a sense that tomorrow will look at least somewhat like today. Take that away, as happens with a sudden layoff, and the mind scrambles to make sense of the void. I’ve seen this firsthand, people spinning into a fog of what ifs: What if I can’t find another job? What if my savings run out? What if I have to move back home? Stephanie Thomas, a counsellor who works with individuals with trauma, once told me that uncertainty lights up the same neural pathways as physical pain. It’s not just worry, it’s biological panic. And the cruellest part? The waiting, the not knowing, often hurts more than the job loss itself.

And it’s not just the ones shown the door. The people left behind, those “lucky” survivors, aren’t sleeping easy either. They show up every morning, wondering if the next wave will sweep them up. I’ve spoken with project leads who keep refreshing their inboxes, dreading that one calendar invite titled “Organisational Update.” It’s like living under a low, constant hum of dread.

You’d think that in a country of 1.4 billion, we’d have some kind of safety net. We don’t. Only a third of Indian companies even pretend to offer mental health support, while nearly 60% of workers say their stress levels are through the roof (Economic Times, 2025). I can’t forget one HR executive who told me, “We have an Employee Assistance Program, but no one uses it, because they don’t trust it.” And here’s the punchline: nearly one in three employees quit last year just to save their sanity. That’s not career planning. That’s survival.

The pain doesn’t stop with those who lose their jobs. The ones who have to deliver the bad news carry scars too. I once trained a manager who broke down after having to lay off his entire team of six. “They looked at me like I’d betrayed them,” he said. “And I kind of had.” That moral injury, having to do what feels wrong in the name of company strategy, eats away at people. It breeds burnout, guilt, and depression in the very people tasked with “managing change.”

Now, layer that onto India’s consumption-driven economy, where middle-class spending literally keeps the engine running, and you start to see the domino effect. When tens of thousands of professionals lose jobs or live in constant fear of losing them, they stop spending. Anxiety replaces ambition. What we’re really looking at isn’t just an economic slowdown, it’s a nationwide mental health emergency quietly unfolding behind closed apartment doors.

Still, I see sparks of resilience everywhere. A former marketing head I know started a small AI-skills training business out of her apartment. Another reinvented himself as a career coach after his own layoff. Reinvention is the new survival skill (Times of India, 2025), but here’s the truth we rarely say out loud: no amount of “upskilling” can fix a system that treats people as expendable. Real recovery requires employers who invest in psychological safety, policymakers who understand that mental health is economic health, and communities that refuse to let laid-off workers disappear in shame.

Layoffs don’t just show up on balance sheets; they show up in the tremor in someone’s voice, the dark circles that don’t fade, the quiet dinner tables. We can’t talk about economic growth without talking about the human beings who make that growth possible. Until we start valuing well-being as much as efficiency, we’re not building a sustainable economy; we’re building a machine that eats its own people.



References:

Business Standard. (2025, October 30). Target lays off 150 employees in India as part of global corporate job cuts. Business Standard. https://www.business-standard.com/companies/news/target-lays-off-150-employees-in-india-part-of-global-job-cuts-125103000709_1.html

Economic Times. (2025, October 29). Why AI-led layoffs are bad not just for the laid off: Big reality check coming for Indian economy. The Economic Times. https://economictimes.com/news/economy/indicators/why-layoffs-are-bad-not-just-for-the-laid-off/articleshow/124908580.cms

India Today. (2025, October 30). End of big workforces? What Amazon's mass layoff really signals. India Today. https://www.indiatoday.in/business/companies/story/amazon-14000-layoffs-ai-workforce-expert-on-future-of-work-big-workforce-2810700-2025-10-30

Storyboard18. (2025, October 9). Over 30% of Indian employees quit jobs for mental health: Indeed study. Storyboard18. https://www.storyboard18.com/how-it-works/over-30-of-indian-employees-quit-jobs-for-mental-health-indeed-study-82284.htm

Times of India. (2025, October 29). Massive layoffs in Amazon, UPS, Target: The new career playbook is reinvention. The Times of India. https://timesofindia.indiatimes.com/education/careers/news/amazon-ups-and-target-are-laying-off-in-big-numbers-how-workers-can-stay-afloat-as-the-global-job-market-tightens/articleshow/124887470.cms