Issuing subpar performance reviews or requiring relocation can thin ranks

By Chip Cutter

Feb. 26, 2023 5:30 am ET

Companies are shedding some workers without imposing layoffs.

Amid a wave of job cuts hitting U.S. white-collar workers, a number of employers are taking other approaches to manage their workforces. Some are adding new restrictions on remote work, stepping up scrutiny in performance reviews or requiring staffers to relocate across the country to keep their jobs.

The moves, though not labeled as layoffs, can at times have a similar effect in thinning a company’s ranks, human-resources specialists and corporate advisers say. It is also a sign that bosses at white-collar firms are back in charge after struggling to retain workers in recent years amid a tight labor market.

As interest rates rise and companies tighten their belts, white-collar workers have taken the brunt of layoffs and job cuts, breaking with the usual pattern leading into a downturn. WSJ explains why many professionals are getting the pink slip first. Illustration: Adele Morgan

At Facebook parent Meta Platforms Inc., META 0.82%increase; green up pointing triangle thousands of employees received subpar ratings in a recently concluded round of performance reviews, the Journal reported. Meta’s leadership expects the ratings to lead more employees to leave in the coming weeks, people familiar with the matter said. A spokesman for Meta, which also cut a bonus metric for employees, said that its performance-review process is in keeping with what the company has communicated to employees, and that the company has long had a goals-based culture that gives incentives for high-quality work.

Other employers have shifted return-to-office policies. Walt Disney Co. said it is requiring employees to work in an office four days a week starting in March, while Inc. is mandating at least three days in offices for much of its staff as of May.

More than 90% of employees in Tyson’s Chicago office declined to relocate.PHOTO: SCOTT OLSON/GETTY IMAGES

Employers can have multiple motivations for restructuring operations or changing workplace policies.

In recent weeks, Walmart Inc. told employees that it plans to close three of its U.S. technology hubs and require hundreds of workers to relocate to places such as Arkansas or California to keep their jobs, The Wall Street Journal reported. At the same time, Walmart told technology workers they are soon expected back at physical offices at least two days a week. Walmart, the country’s largest private employer, hopes to relocate most staff in the offices that will close, and some will be allowed to become full-time remote workers, a spokeswoman previously said. Those who leave will get severance, she said. The move affects a small percentage of Walmart’s around 1.7 million U.S. employees.

A Walmart spokeswoman added Friday that the closure of its technology hubs is in no way a strategy to reduce head count and that the company hopes “all affected choose to continue their careers with Walmart.”

Other recent corporate decisions are likely thinly disguised attempts to reduce staff as the economy shifts, said Harry Kraemer, a former chief executive of healthcare company Baxter International Inc.

Companies might feel reluctant to admit that they hired too quickly in the pandemic or incorrectly forecast growth and are now looking to correct, said Mr. Kraemer, who works as a professor of leadership at Northwestern University’s Kellogg School of Management.

“It’s very much a layoff without calling it a layoff,” said Sevin Yeltekin, an economist and dean of the Simon Business School at the University of Rochester.

Though the labor market remains historically tight, with a 3.4% unemployment rate as of January, many companies are looking to signal to investors that they are taking steps to cut costs and increase efficiency, executives and advisers say.