Why Companies Lay Off Workers Even When Profits Are Up: "I'm Not Paying Someone to Fight With Me?"

America has a problem, a layoff problem. Companies claim to be making money hand over fist. We see the press releases, we see the earnings reports, and yet, according to Fast Company, both the tech and government industries were hit the hardest as more than one million jobs were lost this year. Additionally, over 300,000 Black women were pushed out of the labor force since Trump’s election. Media outlets like Forbes called it “an exit because Black women felt unsafe,” but that is far from the full truth. Black women were fired, not freely walking out of their corner offices in protest. So, why the shift?

When we read headlines about companies making record profits, it baffles many of us that these same companies would then turn around and fire people. The truth is, profits do not always mean stability, and layoffs are driven by strategy, not survival. Wall Street cares more about the future than the present, and public companies do not operate on today’s profits. They operate on investor expectations. Profits may be up, but growth is slowing, sales projections look weaker, and market demand is expected to drop.

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Many small business owners have voiced their grievances as well, saying that their layoffs are correlated to the financial squeeze they feel from government fees and taxes. “Employees don’t realize it, but we pay employer taxes, the same taxes as the employee. We pay insurance tax, reemployment tax in some states, and unemployment insurance, and that’s just a few. So when a company, whether big or small, decides they cannot afford to pay higher wages, it is not because the salary is unaffordable. It is the additional taxes from that salary that ultimately hurt our bottom line,” says the owner of Slice Slice Baby. Cutting down payroll is always the first decision for corporations and small businesses when interest rates go up and debt payments increase. Employees are the fastest and biggest expense they can eliminate, not just because of salaries, but also because of the taxes associated with them.

Companies are also shifting to automation and AI to replace roles and reduce the need for human teams, with the overall goal of outsourcing labor overseas. The goal is not necessarily survival, but higher profits with fewer people. Serial entrepreneur and author Lisa K. Stephenson says, “Companies are shifting away from 'what’s exciting' and leaning more into 'what won’t screw me over'. That is not failure, it’s adaptation. Whether it’s media and creative spaces, tech, or government workers, it’s late-stage consumer psychology and everyone is sick of it. Employees get mad at their employers who pay them for their time but praise the brands who simply market to them and sell them junk that depreciates over time. Employee: mad at Shein for paying minimum wage. Consumer: loves Shein for affordable options, even though it’s plastic materials that are harmful to health and the environment. No one is satisfied.”

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Resent the boss who feeds you, worship the brand that extracts from you, attack the platform that offers opportunity, but defend the corporation that sells illusion. It’s upside down because marketing replaced meaning and, as Joe Quartin said, “I’m not paying someone to fight with me.”

A young woman who works from home recently went viral on TikTok for refusing to turn on her camera when her employer requested that she do so. She recorded the video as a protest against companies that believe since they give you a paycheck, they have the right to control your time. When in actuality, that is correct. They are essentially buying your time for an amount you have both agreed upon. So, when you are asked to show your face on company time, which is an expectation and condition of your employment, refusing to do so is insubordination and grounds for termination. This young woman believed otherwise, and this kind of pushback is making employers retaliate, not with emotions, but with spreadsheets.

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My colleague here published a piece discussing the changes coming to the entertainment landscape, which directly connects to what is being discussed here. Producers are now looking to actors and other talent to pay to play, and it is not evil, it is fatigue. Fatigue from entitlement, missed deadlines, poor attitudes, low ROI, public backlash from workers, and zero loyalty to the very people paying them for their time. So, it is a natural reaction for companies and producers to say, “We need to bring in AI.”

Companies now know what creatives want: guaranteed upside, zero risk, reciprocity, and the elimination of one-sided dependency. Some may argue that their talent comes from the education they worked hard to earn, or from the countless hours spent in acting school and training to be selected for a modeling or acting gig. But that is no longer enough when attitudes and output do not align with the financial risk being taken.

Talent will pay photographers, script readers, stylists, and more, yet become angry with a film producer for asking them to redo a scene. An employee will pay for professional headshots, a recruiter to tweak their résumé, and platforms like Indeed and ZipRecruiter to find better job opportunities, but still feel resentful when their employer celebrates a sales quota with only a pizza party.

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Layoffs are happening because companies are protecting shareholders, maximizing margins, preparing for future shutdowns, increasing executive compensation, and replacing humans with technology. This is meant to send a message of discipline to prospective workers. We are no longer in an employee-led market. People want to be appreciated. They want support, gratitude, efficiency, and to work with teams that respect the business and are willing to help it grow.

Will this end well? Maybe not. More people are boycotting, frustrations are rising, customer service has declined, and quality has dropped, yet prices continue to rise. This will lead to fewer people spending money, not out of resentment, but out of principle. Job security, like the American Dream, is now a myth, even at successful companies and major studios. The solution is not necessarily to jump into the market by starting a business or producing your own art. The solution is to make yourself an undeniable asset to the company again. This is not a piece defending corporations. It is a piece shedding light on what is happening and how we can collectively work to improve it.

by Harley Miller