Guess who gets more severance in the era of endless layoffs

A new analysis of severance packages finds that women continue to receive smaller payouts than men after layoffs, underscoring another dimension of workplace inequality as job cuts ripple through the economy.

According to the latest Severance & Salary Benchmarking Report by outplacement firm Challenger, Gray & Christmas, women were paid 4.6% less in severance than men on average across all industries in 2024.

Despite the overall gap favoring men, certain industries bucked the trend. Education employers, for instance, awarded women significantly larger severance packages, with women receiving about 75% more than men on average. Within the chemicals industry, women's packages were on average 27.6% higher than men's, and insurance and automotive industries also paid women more, with 10–22% higher average severance.

Yet the overall gap — smaller than typical wage disparities but still significant — reflects how pay inequities persist beyond regular wages. HR leaders say that ensuring fairness in severance decisions should be part of broader efforts to demonstrate organizational equity and respect, according to the report; they add that a persistent gender gap in this area can undermine trust and damage employers' reputations, especially when layoffs hit hard.

“Your former people are your people. How you part ways says everything about who you are as an employer," Challenger’s CEO John Challenger wrote in the report.

The era of 'forever layoffs'

The findings come as the job market cools. This year has already seen major firms announce layoffs, although the benchmarking report itself is based on 2025 and 2024 data.

Among publicly reported plans in early 2026 include 5,450 layoffs across Meta $META, Citi, BlackRock $BLK, Macy's $M, and logistics and warehousing firms. Microsoft $MSFT has faced rumors of large workforce reductions, though company leadership has publicly denied broad layoffs, while Amazon $AMZN is reportedly planning to cut headcount by thousands, although specifics remain unclear.

The December 2025 U.S. payroll report showed a much weaker job market than anticipated, with only 50,000 non-farm payrolls added, below forecasts of around 70,000; significant downward revisions to October and November; and a dip in the unemployment rate to 4.4%.

Last year saw the slowest annual job growth since 2003. Employers also cut more than 1.1 million jobs through November, the most since 2020, and a 54% increase from the same period a year prior, according to a separate report by Challenger, Gray & Christmas. This included more than 60,000 jobs cuts at Amazon, UPS, and Target $TGT, announced in October last year.

Not only is the job market contracting, but shifting firing trends make the threat of layoffs a constant specter for workers. Glassdoor Economic Research says we're in the era of "forever layoffs," a term that describes how "job cuts come in never-ending waves instead of a tsunami." The researchers found a trend among employers to conduct smaller but regular layoffs instead of less frequent yet larger cuts.

"Rolling layoffs may give companies a way to reduce headcount without making headlines, but they create cultures of anxiety, insecurity and resentment at companies," Glassdoor's report outlines.

'AI-washing'

The narrative touted by companies is that layoffs are due to artificial intelligence. However, a new survey by Resume.org, an AI-powered resume service, found that almost 60% of hiring managers emphasize the role of AI when they have to lay workers off, or freeze hiring, because it “plays better with stakeholders than citing financial constraints.”

Echoing these findings, experts told CNBC in November that some companies could be “AI-washing” their job cuts, to cover up business slip-ups and regular cost cutting.

“We spend a lot of time looking carefully at companies that are actually trying to implement AI, and there’s very little evidence that it cuts jobs anywhere near like the level that we’re talking about. In most cases, it doesn’t cut head count at all,” Peter Cappelli, a professor of management at the Wharton School and director of its Center for Human Resources, told CNBC.

“Using AI and introducing it to save jobs turns out to be an enormously complicated and time-consuming exercise." He added, "There’s still a perception that it’s simple and easy and cheap to do, and it’s really not.”