Employee confidence dropped to a record low of 44.4% in February.

That's according to Glassdoor, which measures this through "the share of employees reporting a 6-month positive business outlook" on their platform and has been tracking the data since 2016.

Employee confidence has fallen 11.2% since its peak in March 2022. The drop could result in lower business output, warns Glassdoor lead economist Daniel Zhao.

"Employees have the desire to quit, but not the opportunity right now," Zhao tells CNBC Make It. "Many workers are stuck in their current positions, and that could result in rising employee disengagement, hampering business productivity."

Layoffs were a driving factor behind the decline in confidence. In February, mentions of layoffs on Glassdoor reached levels not seen since July of 2020 — near the peak of the pandemic era — and have increased 4.9% since February 2024. As many as 172,017 layoffs were announced in February, the most for a month since July 2020, according to outplacement firm Challenger, Gray, & Christmas.

"Even employees who have survived layoffs are feeling stressed waiting for another layoff to come or overworked as they have to pick up the additional work on their now less-staffed teams," Zhao said in the report.

Government jobs had the largest drop in confidence year-over-year (7.3%) and were tied with restaurant & food service roles for the lowest employee confidence (38.1%). Zhao says it's the result of job cuts initiated by Senior Adviser Elon Musk and the Department of Government Efficiency. Federal government jobs declined by 10,000 in February, according to the Bureau of Labor Statistics.

Sectors with the lowest employee confidence, February 2025

• Government & Public Administration: 38.1%
• Restaurants & Food Service: 38.1%
• Retail & Wholesale: 38.3%
• Arts, Entertainment, & Recreation: 39.2%
• Personal Consumer Services: 40.3%

Sectors with the largest year-over-year drop in employee confidence, February 2025

• Government & Public Administration: -7.3%
• Aerospace & Defense: -6.8%
• Nonprofit & NGO: -4.0%
• Manufacturing: -3.7%
• Energy, Mining & Utilities: -3.3%

"Job and contract cuts are a significant weight on sentiment for federal workers and workers in industries that rely on federal funding," Zhao says.

Aerospace & defense and nonprofits & non-governmental organizations also experienced drops in confidence of 6.8% and 4.0%, respectively. Both industries rely heavily on government contracts and could see some turbulence if cost cuts come.

In terms of employee confidence by workplace seniority, mid-level employees saw the largest decline — down 1.7% since February 2024.

Middle management has been hit heavily by layoffs: Amazon CEO Andy Jassy notably requested teams to "increase the ratio of individual contributors to managers" last September, and experts have said that other organizations could follow.

"What you saw from Amazon is just the beginning," UC Berkeley professor Naeem Zafar told CNBC last year.

Mid-level employees were not the only ones affected, though. Senior-level & entry-level employee confidence both fell in February, with entry-level employee confidence reaching a record low.

Zhao says employers can help employees by being honest with their staff.

"Open communication and transparency are a first step in building confidence among employees even in uncertain times," Zhao says.

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