A growing number of Gen Z Americans are worried about losing their jobs in the event of an economic downturn—despite signs the broader labor market remains stable.
A new report from Allianz Life shows that 64 percent of Gen Z workers fear they could be laid off in the next year, up from 55 percent just a few months ago and significantly higher than the 45 percent of millennials and 41 percent of Gen Xers who share the same concern.
The findings show a growing generational divide in workplace confidence, and these fears are not necessarily unfounded. Along with the headline-grabbing job culls in the federal government which began earlier this year, a throng of companies have already laid off workers so far in 2025, including Microsoft, UPS, Dell, BP and others. What’s more, a July 2 report by outplacement firm Challenger, Gray & Christmas found that job cuts have soared to their highest midyear total since the COVID-19 pandemic.
“It can definitely lead to you feeling expendable,” David Rice, a HR expert at People Managing People, told Newsweek. “You don’t feel you have influence at that stage of your career and the idea of freelancing or contract work probably feels like the Wild West to many of them.”
Perception Vs. Data
Despite the rising concern, labor market indicators have shown relative strength in recent months. The unemployment rate remains low and overall layoffs have stayed low, according to the most recent Job Openings and Labor Turnover Survey (JOLTS). Job growth has also increased, with U.S. employers posting 7.8 million vacancies in May, the Labor Department reported Tuesday, up from 7.4 million in April
Rice said perception matters just as much as data. “They’ve not weathered many storms like this,” he said of Gen Z workers. “Many of them still have very raw skill profiles, and all this is happening at a time when entry-level jobs are said to be in flux.”
Columbia Business School professor Rita McGrath said that Gen Z’s uncertainties around layoffs are still well-founded, given that their positions at work can often be precarious.
“If you’re young, it’s often kind of last hired, first fired, and if companies aren’t hiring and if they are trying to lay people off, they might be cutting their youngest, least-experienced workers who aren’t yet providing a lot of value to their companies,” she told Newsweek.
Where Layoffs Are Happening
Much of Gen Z’s concern may stem from the industries they’re entering. Sectors like tech, retail, media and government have seen notable job losses in the past year, and younger workers are often overrepresented in these areas.
“Tech has seen one of the biggest booms in layoffs,” Rice said. “Is it a coincidence that it’s the sector developing AI and starting to think it needs less people? No, I don’t think it is.”
Jason Leverant, president and COO at staffing firm AtWork Group, agrees that younger workers are being disproportionately affected by news from the tech world. “This is likely shaping the fear and uncertainty that we’re seeing from Gen Z,” he told Newsweek, adding that it could be a “great catalyst” for young professionals to look at other industries where their skills might be better utilized.
Still, Rice warned that it’s not just tech. “Media has been laying people off en masse for 20 years… and the mass layoffs in government has created a ton of uncertainty.”
Financial Pressures
Economic anxiety isn’t happening in a vacuum. Younger workers are entering the job market under a mountain of student debt and facing high costs, particularly in cities.
“Student debt is astronomical,” Rice said. “The average graduate finishes school with around $77,000 in debt… Rent is out of control in most major cities. This generation doesn’t have assets because they simply can’t afford the price.”
He added that housing costs have outpaced income growth by a wide margin: “Since 1985, the average price of a house has increased 408 percent, but median household income has only increased 241 percent,” which further demonstrates the financial pressures on workers.
In cities like New York, even a seemingly solid salary may not go far. “If you’ve landed a job in the NYC metro area as a young person making $80,000 a year… your CEO has ordered everyone back to the office in a metro area where a studio apartment costs $3,200 a month,” he continued. “Does an economic downturn sound threatening to your ability to sustain yourself? Of course it does.”
AI Anxiety
Emerging technologies are also contributing to Gen Z’s fears, with the rise of artificial intelligence being one of the most profound changes to how we live and work in recent memory. In a recent World Economic Forum survey, 41 percent of global companies said they expect to reduce their workforce in the next five years due to AI.
“Is it a coincidence that tech is laying people off and building AI tools at the same time? I don’t think so,” said Rice. “It creates this feeling that you’re training yourself for a job that might not even exist by the time you’re good at it.”
Rice argued that the impact of AI is especially acute for workers in creative, administrative, and technical support roles—jobs that were once considered safe entry points but are now at the center of the AI frontier. “A lot of early-career roles are being reimagined or eliminated entirely. That makes it harder for young workers to even get a foot in the door,” he said.
Still, AI may not necessarily be an imminent job killer. Leverant believes the anxiety surrounding AI is certainly worthwhile, but perhaps premature. “AI is a tremendous efficiency-gaining tool, and not really able to truly take jobs away… yet,” he said. “There are many, many jobs that exist in the economy today that require human hands to get the work done.”
Still, the pace of change is disorienting, especially for workers still trying to build up their skill set. The uncertainty around where AI is headed—and how fast—adds a psychological burden to an already complex job market.
“Right now, we don’t have clear pathways for adapting to AI disruption,” Rice said. “There’s no universal AI literacy program, no standard upskilling route. It’s just constant headlines and speculation, and that’s enough to make anyone anxious—especially if you’re just starting out.”
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