New research from global workforce solutions firm Careerminds reveals that the most loyal workers are the least prepared for layoffs and are among the hardest hit when they happen.
The survey of 900 U.S. workers who were laid off after spending five or more years of service with the same employer finds that long-tenured employees are being blindsided in large numbers, revealing what researchers describe as a “loyalty tax” impacting some of the workforce’s most committed employees.
The survey found that:
- More than seven in 10 laid-off workers with long tenure believed their loyalty would protect them from losing their jobs.
- Two-thirds (66.3%) of long-tenured workers felt blindsided when their layoff was announced.
- Almost half (46.5%) had a resume that was significantly out of date or didn’t exist at all, and more than half (53.3%) had a mostly or completely inactive professional network when the layoff took place.
- More than half (51%) said it took them longer than six months to emotionally process the layoff, and 58% are now less loyal to employers as a result of their experience.
“One of the biggest misconceptions employees still have is that loyalty will protect them from layoffs. Unfortunately, many longtime employees discover all too late that their years of dedication don’t necessarily equate to job security,” Amanda Augustine, certified professional career coach and resident career expert at Careerminds, said in a statement.
“In many cases, these workers have stopped actively networking, updating their resumes, or exploring outside opportunities because they believed they were safe where they were,” she continued. Then, when a layoff happens, they’re forced to start a job search from scratch in a market that’s changed dramatically since they last looked for work.
“These employees often need the most support because they’re not just dealing with financial stress, but they’re also rebuilding their self-confidence and professional identity after spending years with the same employer.”
Five key takeaways from the survey include:
1. The psychological contract: For decades, many employees were sold on a false promise that “the longer you stay, the safer you are.” The survey shows how deeply that belief is still held: more than a quarter of long-tenured workers (26.7%) said their tenure would protect them from a layoff, and 29% reported having no concerns at all about losing their job. Their loyalty even led 58% to turn down at least one other job opportunity before being laid off, because they believed their tenure made leaving unnecessary or too risky.
2. Loyal workers are the least prepared: Years of settled employment left loyal workers acutely unprepared for the modern job market. Just 13.8% could have applied for a new role with their current resume, and only 11.1% had an active professional network they could lean on immediately. For the long-tenured employee, many are essentially starting their job search from scratch, often years behind colleagues who moved around more.
3. Severance packages aren’t reflecting service: While every employee deserves a respectful, consistent exit process regardless of length of service, the reality of leaving after five years is fundamentally different from leaving after just a few months. Almost two-thirds of respondents (62.4%) said they felt their years of service weren’t reflected in the support they received during the layoff process. The situation becomes even more challenging when you consider that 45% received no severance pay after five or more years of service, 23.6% received less than they expected given their tenure, and more than two in five (40.7%) had less than one month of living expenses saved when they were laid off.
4. The emotional toll: For workers who had invested years in a single employer, losing a job can create both financial stress and a loss of identity. Financial stress was the most-cited defining emotion in the weeks and months following a layoff (24.1%), followed by depression or persistent low mood (22.5%), anxiety or panic (18.4%), and loss of professional confidence (11.1%). One in four (25.4%) took more than a year to emotionally process the experience.
5. Layoffs may be permanently reshaping workplace loyalty: Layoffs could be damaging employer-employee loyalty, as a quarter of respondents (25%) said they now feel significantly less loyal to employers as a direct result of their layoff, and only 16.4% say their attitude toward employer loyalty hasn’t changed at all.
Methodology: The survey was commissioned by Careerminds and conducted via Pollfish in April 2026. A total of 900 U.S. workers aged 18 and older who had been laid off after five or more years of continuous service with a single employer participated. The survey results were analyzed to ensure representation across industries, generations, and tenure bands.
Photo credit: rudall30/Freepik
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Tags: "loyalty tax", employees, job cuts, job loyalty, layoffs, Payroll, workers
