Quick summary: A new paper published in ISPCE Bulletin argues that redundancy should be treated as a prolonged psychological process rather than a single financial or administrative event, with almost four in every thousand employees made redundant between March and May 2025 and pressures set to continue as artificial intelligence reshapes industries. The findings show that poorly managed job losses damage not only those made redundant but also colleagues who remain, through survivor guilt, disengagement and long term mistrust of management, while well designed support can instead foster posttraumatic growth, renewed purpose and greater self-awareness. For employers, healthcare practitioners and policymakers, the paper’s message is that redundancy processes should be built around psychologists’ expertise and evidence such as self- determination theory, since how job cuts are handled carries consequences for mental health and workforce well-being that rival their financial impact.
A new paper is calling on employers to treat redundancy as far more than a financial decision, warning that poorly handled job cuts can cause lasting psychological harm to entire workforces.
The piece, published ISPCE Bulletin by Irina Roncaglia, PhD, a chartered psychologist argues that redundancy should be understood as a prolonged emotional process rather than a single administrative event. It draws on established psychological theory alongside the author’s own professional experience to map out how people typically move through distinct stages of shock, denial, anger, guilt and eventual acceptance.
Roncaglia explained: “This reflective piece is born out of a synergy between professional inquiry and deeply personal experience. Having extensively investigated the complex career and identity transitions of retiring ballet dancers during my doctoral research, I recognised a profound parallel in the corporate world.”
The timing is notable. Office for National Statistics figures cited in the paper show that between March and May 2025, almost four in every thousand employees were made redundant. With artificial intelligence reshaping many industries, the paper suggests these pressures are likely to continue.
One of the central arguments is that organisations often underestimate the psychological cost of job cuts because financial spreadsheets and key performance indicators cannot capture emotional fallout. The paper notes that losing control over such a major life event disrupts a fundamental psychological need for autonomy, which helps explain why redundancy so often feels destabilising.
Roncaglia said the piece follows a different format: “Rather than presenting a traditional, data driven empirical study, this article is intentionally framed as a reflective, experiential narrative designed to capture the lived realities of career transition.”
The paper also pays close attention to survivor guilt, the often overlooked distress felt by employees who keep their jobs while colleagues are let go. These workers can experience shame and a sense of unfairness that may lead to disengagement or long term mistrust of management.
The paper does not present redundancy purely as a source of damage. It explores how people can experience post traumatic growth after redundancy, including renewed clarity about their values, a stronger sense of purpose. Roncaglia said: “Instead of losing employees both literally to the job market and metaphorically to identity loss and despair, redundancy can be reframed. It can become a structured pivot point that fosters diversified professional development, personal growth and conscious, intentional human flourishing.”
The author argues that coaching, clinical and counselling psychologists have an important role to play, both in supporting individuals through the transition and in helping organisations design more compassionate, psychologically informed redundancy processes. She added: “This approach aims to cultivate a more resilient present and future workforce by actively safeguarding the core tenets of Self Determination Theory: autonomy, belonging and competence.”
Rather than treating redundancy as an unavoidable side effect of business strategy, the paper urges leaders to weigh its human cost as seriously as its financial one. How job losses are managed matters just as much as the decision itself, both for the people who leave and for those left behind.
