Layoff fears leave Canadian employees putting off big-ticket financial plans for next year
Half of Gen Z employees plan to look for a new job in 2026, and more than a quarter of Canadian workers say they will delay major financial decisions next year because they fear being laid off.
A new poll from Employment Hero, a provider of employment solutions for Canadian businesses, surveyed more than 800 part-time and full-time employees across the country to assess how 2025’s challenging job market has shaped career progression, expectations and outlook for 2026.
In 2025, economic uncertainty, exacerbated by the trade war with the US, led many employers to slow down or freeze hiring.
The survey suggests that while this job market crunch affected workers across generations, Gen Z employees may be bearing the brunt as they report underemployment, misalignment with their desired career fields and limited confidence in advancement.
One in five employed Canadians (22 percent) say their current role is below their education level, a sentiment shared by nearly a quarter of those with university degrees (24 percent) and 23 percent of those with college-level education.
Among Gen Z employees, almost one in three (32 percent) report that their job falls short of their education level, compared with 20 percent of Millennials and 16 percent of Gen X.
The same pattern appears when it comes to working in a desired field.
Overall, 31 percent of employed Canadians say their role is not in their preferred area.
For Gen Z, that figure rises to almost half (46 percent), versus 28 percent of Millennials and 25 percent of Gen X.
Looking ahead to 2026, a gap emerges between what Gen Z employees believe they deserve and what they realistically expect from their employers.
While 82 percent of Gen Z employees say they merit a raise next year, only 53 percent anticipate they will receive one.
For promotions, 62 percent feel they deserve to move up in the coming year, but just 32 percent expect it to happen.
“The job market has been tough on everyone this year, but especially on Gen Z, who are just getting started in their careers,” says Kevin Kliman, president of Canadian Business at Employment Hero.
He adds that while it’s hard for employers to promise promotions in an uncertain economy, they can still invest in young workers by listening to why “they feel a mismatch between their goals and their current role,” then working with them to find mentoring and broader exposure to the business so they can grow.
Many younger workers are already preparing to move.
According to the survey, 55 percent of Gen Z employees plan to look for a new job in 2026, compared with 39 percent of Millennials, 30 percent of Gen X and 6 percent of Baby Boomers.
Layoffs formed a visible part of the 2025 landscape, and concerns about job cuts extend into next year.
The survey finds that 16 percent of employed Canadians feel they are at risk of being laid off in 2026, and one in four (25 percent) report anxiety about that possibility.
This concern is shaping financial behaviour: 26 percent of employed Canadians plan to delay major financial decisions in 2026 due to the perceived risk of job loss.
Regional results point to elevated worry in Ontario and Alberta. In both provinces, 20 percent of employees say they are at risk of being laid off in 2025.
The survey notes that major industries in these regions – such as vehicle manufacturing in Ontario and oil and gas in Alberta – were significantly impacted by the trade war with the US Anxiety levels are also highest there: 29 percent of Ontario employees and 24 percent of Albertans say they feel anxious about the potential of getting laid off.
“Anxiety around potential layoffs can ripple through a workplace. It affects morale, focus and how teams show up for each other,” says Kliman.
He notes that in uncertain times, people look to their leaders “for stability and transparency.”
When employers communicate openly, share their plans and give employees a sense of what to expect, it helps ease that tension and builds trust.
