In addition to layoffs, companies are withdrawing job offers

After a successful summer internship at a mortgage tech company, Alana Klopstein was thrilled to get a job offer.

He signed the contract in January 2022, giving him peace of mind in his final year at UC San Diego. Then in June, three months before her start date, she received an email from the company. The downturn in the market forced the company to make difficult decisions, it read. His offer was withdrawn.

“It was really devastating,” said Klopstein, 22, who lives in San Diego. “I had a vision of what my life would look like, what kind of changes I would have to make to transition into the working world after years of schooling, and that was no longer a thing. “

While tech companies and other companies are laying off workers by the thousands, others are also revoking job offers — sometimes just days before a start date and long after being relocated or restructured. their lives. Withdrawing offers is not as widespread as layoffs, but the practice may grow if the economy goes into a recession.

“If the economy is what people think it’s going to be and we’re in the middle of a meaningful recession, I expect you’ll see an impact on college students and school graduates in business,” said Dan Kaplan, senior associate at the client. at Korn Ferry, a management consulting firm.

Companies often withdraw offers when “a shock hits the system,” such as the 2000 dot-com implosion, the market jitters after 9/11 or the 2008 recession, he said. Recently, companies have withdrawn offers at the start of the pandemic when there is widespread uncertainty about the future.

Now, months of fears of a recession, coupled with turmoil in industries like crypto, financial services and technology, have resulted in this latest round of canceled offers affecting the average entry-level. and mid-career positions.

“You see all this influx of opportunity, this influx of activity, there’s this expectation that we’re going to see all this growth,” Jamie Kohn, director of research at consulting firm Gartner’s HR practice, said. about companies’ hiring practices as the pandemic subsides. .

“With the slow recovery of the market, companies don’t see that growth on the horizon. They’re starting to think that maybe it’s going to be a few more years before they get to where they think they’re going to be now,” Kohn said. .

Zening Zhao, 24, interned at tech companies but started hearing rumors of layoffs or hiring freezes as he neared graduation. Working in finance seemed more stable, so he accepted a job as a Python software developer at a trading company in Chicago.

After graduating in December from the University of Washington, Zhao packed up her life in Seattle, moved in and signed a lease for a new apartment. Five days before her start date, she received a call from her boss telling her that her offer had been rescinded due to the company’s cost reductions.

“I felt desperate at the time,” Zhao said. “I have prepared everything for work. This is the darkest day of my life so far.”

Although the trading company paid $10,000 for Zhao’s relocation expenses, the high rent in Chicago forced him to leave the city, move back to Seattle and stay with a friend. He is currently facing a tough job market flooded with unemployed engineers – after submitting more than 100 job applications, he has received few responses.

The experience made him more cautious at the end of job offers. And that level of uncertainty can hurt companies later, says Gartner’s Kohn. Today’s job candidates say they don’t trust companies to be honest with them during the hiring process, he said, and they’re more likely to entertain other job offers after they’ve already received them. .

“Things like taking away and canceling offers just magnified the way that trust was broken,” Kohn said.

Rejecting candidates with little regard for future relationships can also affect recruiting companies. Good talent talks to other good talent, and such actions can give companies a black eye. On the other hand, helping hires land new gigs is a good move that can make a positive impression on candidates.

After interviewing with two companies, Evan Patterson got job offers that were later rescinded the same week. But the founders of both start-ups said they would forward his resume and share his content with their networks in hopes of helping him find another gig. Those connections are now helping him in his current job search.

“They’re just decent people in response, and that’s more than I could ask for,” said Patterson, 28, who lives in Chicago and does community and business-to-business influencer marketing for software startups. “I still tell them in two, three, four years, things can change, pat me on the back.”

Meta paid Noor Abdellatif six weeks worth of salary when the social media giant rescinded his job offer last spring for a remote recruiter position. Although he was devastated that the job didn’t work out, the pay gave him a higher opinion of the company.

“They know that people are betting their lives on that and it’s just, my respect honestly grows more … to Meta for doing this,” said Abdellatif, 32, from Severn, Md. “That was something unheard of.”

By September, he got a new job as a recruiter at an engineering firm. The annual salary is $20,000 less than what he can make at Meta, but his new employer has never laid off workers during economic downturns in its 30-year history, he said.

“That’s my main goal – stability with a high salary,” Abdellatif said.

The number of retracted offers today is “nowhere near the level we’ve seen in the past,” said Korn Ferry’s Kaplan, because companies often have other options to tap before they withdraw. of offers, such as reduced bonuses or layoffs.

“You spend a lot of time and energy to bring people to your company, the worst thing you can do is go back to them and turn it around,” he said. “Companies really try to avoid them.”

But when this happens, it’s important to reach out to your networks, whether that’s LinkedIn, an alumni association or an industry-specific group.

Isa Goldberg received hundreds of supportive comments and messages from connections on LinkedIn after she posted about her experience with a healthcare consultant job offer that was revoked six days before her due date. to begin with.

“I was just shocked,” Goldberg, 27, who lives in Brooklyn, said of the recovery. “I just took an hour to cry, had an emotional moment, came to the ground and realized what happened.”

The company offered to pay him $5,000 or let him remain in the job applicant pool until January, when it might have a job opening. He tried to negotiate for a higher payment but was unsuccessful.

Goldberg ended his lease in New York City, moved with the family to save money and looked for a new opportunity. He found one in three weeks, thanks to a referral from a college friend.

“It’s definitely a shock when you think you’re on the diving board of your career, and you jump off and end up with a shallower bottom than you expected,” Goldberg said.

But, he said, “the benefit of having a strong, supportive network far outweighs the momentary inconvenience caused by getting a rescinded offer. Let people help you quickly.”

Klopstein, from San Diego, is still looking for a job in software engineering. It’s been a scary last few months, with interviews going nowhere, radio silence after submitting applications and emails saying companies are no longer hiring.

He thought about getting a part-time job outside of tech just to distract himself until he found something. But he tries to remain optimistic.

“It’s a tough market,” Klopstein said. “Luckily I have some friends who are looking for things, and it gives me hope that something is waiting for me soon.”