Many professionals assume that exceptional performance offers an unbreakable shield against job loss, translating into perpetual job security during economic uncertainty. However, the reality of corporate restructuring and workforce reductions challenges this notion for even the most accomplished employees. Understanding the difference between being fired for poor results and being laid off due to a business decision is the first step toward career resilience. Layoffs are a function of corporate strategy and market conditions, meaning individual contribution often becomes a secondary factor in the final selection process.
The Short Answer: Yes, High Performers Get Laid Off
The direct answer to whether a top employee can lose their job in a reduction in force is an unambiguous yes. It is important to distinguish a “layoff” from a “termination for cause,” which results from poor performance or misconduct. A layoff, also known as a reduction in force (RIF), is driven by the company’s organizational or financial needs, not the individual’s failure to meet job standards. The role itself is eliminated, making performance metrics irrelevant.
When a company reduces headcount, selection criteria shift from individual merit to departmental necessity and cost structure. A high performer’s output does not save a position the business deems unnecessary. The most productive engineer is just as vulnerable if their function is deemed redundant or too costly, emphasizing that job security is about alignment with evolving business strategy.
Understanding the True Drivers of Layoffs
Layoffs are triggered by macro-level forces that dictate the size and shape of an organization, independent of individual employee reviews.
One driver is an economic contraction that forces companies to cut operating expenses to maintain profitability. In these scenarios, budgets are slashed, leading to the elimination of non-revenue-generating or future-facing projects requiring significant staffing. This is a preemptive measure to ensure the long-term solvency of the business during reduced demand.
Major corporate activity, such as mergers and acquisitions (M&A), also generates workforce reductions due to role redundancy. When two companies combine, overlapping functions—like duplicate finance or product management teams—are targeted for consolidation. The combined entity does not require two employees for the same function, leading to elimination regardless of individual achievement. The process aims to streamline operations and realize synergy savings.
A company may also undergo a strategic pivot, deciding to exit a market or discontinue a product line to focus resources elsewhere. If the business shifts from hardware manufacturing to software services, the team supporting the legacy hardware product may be dissolved. These realignments necessitate a different workforce skill set, rendering the expertise of previously high-performing teams obsolete.
When Performance Does Not Equal Protection
Even after the decision to reduce staff is made, specific internal criteria determine which employees, including high performers, are selected for departure.
The most straightforward scenario is when a high performer’s specific role is deemed entirely redundant, meaning the function itself is eliminated from the organizational chart. For instance, an excellent project manager for a canceled project will see their position dissolved. Their success on the now-defunct project offers no protection from this structural change.
Another factor is the high compensation cost associated with senior employees. When a company needs immediate cost savings, targeting the highest salaries and most expensive benefits packages yields the fastest results. A high performer with significant tenure and corresponding salary increases may be selected over a lower-paid, newer employee because their expense reduction impact is greater. This cost-driven calculus overrides the value of their higher productivity.
Selection can also occur through the complete dissolution of the employee’s entire department or business unit. If a company decides to outsource its internal IT support or shut down its research and development laboratory, all employees within that unit are let go. The high performer’s fate is tied to the elimination of the unit’s budget and mandate, leaving no internal position to transfer to.
In some cases, the high performer’s skills are too specialized or lack transferability to the company’s new direction. An expert in an older programming language or a market specialist for a recently divested region may find their deep knowledge is no longer required. While they performed excellently in their original domain, the company may be unwilling or unable to invest in retraining them, making their expertise a liability.
The Role of Managerial Discretion and Internal Politics
The final list of employees selected for a layoff is often influenced by subjective factors, making the process less purely data-driven than assumed.
Managerial discretion plays a substantial part, as direct supervisors provide input on who can be spared and who should be included. A manager with stronger rapport or personal loyalty to one employee may use the RIF to protect their preferred staff member, even if both are high performers.
Internal politics and networking relationships can quietly influence the selection process, providing a hidden layer of job security for well-connected individuals. Employees who cultivate strong relationships with senior leadership may have their names removed from a preliminary layoff list through informal advocacy. This protection is based on the strength of their internal support network, not objective performance metrics.
Performance review systems, such as stack ranking, can also facilitate the selection of high performers who are not popular. While these systems aim for objectivity, they can be manipulated to push out employees perceived as difficult or not aligned with the manager’s vision. This subjectivity prioritizes team cohesion or managerial preference over pure productivity data.
Actionable Steps for Risk Mitigation
High performers can take concrete steps to increase career resilience against external economic forces and structural corporate changes.
- Actively diversify your professional skill set to ensure it is easily transferable across different industries and business models. Employees should focus on acquiring cross-functional proficiencies, such as learning data analysis or project management, rather than becoming exclusively specialized in a single, narrow domain. This broad applicability of skills makes an employee an attractive candidate across various organizational structures.
- Maintain a strong professional network that extends well beyond the boundaries of the current company. Cultivating relationships with former colleagues, industry peers, and recruiters ensures that one is aware of market demand and potential opportunities outside their current employer. This external visibility drastically reduces the time needed to secure new employment should a layoff occur, turning a potential crisis into a smoother career transition.
- Build a substantial financial safety net. Experts generally advise accumulating an emergency fund equivalent to three to six months of living expenses to cover essential costs without immediate income. This financial cushion prevents employees from being forced to accept the first available job offer after a reduction in force, allowing for a more strategic career move.
- Understand the company’s long-term strategic direction and anticipate major shifts in the market. By monitoring public statements, investor calls, and internal memos, a high performer can proactively pivot their focus toward areas the company is investing in and away from those being scaled back. This internal awareness allows the employee to align their personal development with the organization’s evolving needs, increasing their perceived value to the remaining core business.