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Bosses Are Firing High Earners Left and Right (And Honestly, We See Why)

Big paychecks can quietly turn into a liability when budgets tighten.

By Stacy Garrels

Edited by Laura Hohenstein

Updated Feb. 17, 2026

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High earners often feel insulated from layoffs. After all, they've climbed the ladder, proven their value, and negotiated strong compensation. But in a tightening labor market that's laser-focused on profit margins and productivity, a large paycheck can become a major liability.

The tech sector, which employs many workers earning $140,000 - $400,000+ a year, has been especially vulnerable of late. In the first few weeks of 2026, employers like Amazon, Intel, and Microsoft eliminated more than 165,000 workers.

When companies look for quick ways to cut costs, high earners tend to stand out. Not because they're failing — they may even be top performers — but because they're expensive.

Below are the uncomfortable reasons bosses often cut high earners first, and ways you can prepare yourself financially to withstand unexpected financial shocks.

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Their salary is an easy line item to cut

High earners represent an outsized share of overall payroll costs. Eliminating one highly paid role can free up enough budget to preserve multiple lower-paid positions, making the decision more efficient from a financial standpoint.

This doesn't mean leadership thinks lower-paid employees drive more combined value. It means spreadsheets often win over nuance when budgets tighten.

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Pay cuts are legally awkward

While many workers, especially those in their 50s, would prefer a salary cut to a layoff, cutting pay can be tricky. The act is fraught with peril, as a salary decrease can raise morale issues, internal resentment, or legal scrutiny.

That's why companies often find it cleaner to eliminate a high-paying role rather than reduce or renegotiate compensation.

They're viewed as "overcompensated"

High earners are often paid for experience, institutional knowledge, or past performance. Over time, leadership may begin questioning whether the current output justifies the cost — especially if there's new leadership or the high earner's role hasn't evolved over time.

Just the perception of being overpaid can put a target on someone's back, regardless of actual performance or market value.

Their role can be restructured

When companies reorganize, high-paying roles are prime candidates for restructuring or removal. Responsibilities may be split across multiple positions, automated, or absorbed by managers.

From the outside, it's downsizing. Internally, it's often framed as "doing more with less."

They're expensive to keep long-term

High earners don't just earn higher wages. They're often more expensive to keep employed, due to higher benefit costs, additional PTO, and larger severance obligations that come with a longer tenure. During periods of uncertainty, leadership may prioritize flexibility over loyalty. This is especially true with companies prioritizing short-term survival.

Their role is too "abstract"

Mid-level and senior high earners often do important but abstract work, like leading those workers who engage directly in revenue-generating activities.

When executives demand cuts, these roles without easily measurable output are often less defensible.

If leadership can't quickly explain in dollars and cents why a role is essential, it becomes vulnerable.

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They aren't seen as future leadership

Some high earners reach a plateau. They perform well but aren't pushing for broader responsibility, new initiatives, or leadership roles.

When companies cut, they often protect employees they see as part of the company's future rather than those maintaining the status quo.

They've priced themselves out of flexibility

High compensation can limit an employee's ability to pivot internally. Lateral moves or reassignments may no longer make financial sense for the company.

As a result, when roles shift, high earners may have fewer internal options than lower-paid colleagues.

Their departure sends a financial signal

Cutting high-earning employees sends a strong signal to investors, boards, and stakeholders that leadership is serious about cost control.

Unfortunately, that symbolism can outweigh individual performance or loyalty.

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They've become harder to replace, but not impossible

Paradoxically, being highly specialized doesn't always protect high earners. Companies may decide that the expensive role is unnecessary. If performance suffers as a result, employers can look for a cheaper replacement.

In lean times, "good enough" often beats "ideal."

They haven't adjusted to new expectations

High earners who rely on legacy systems, old workflows, or past wins can appear resistant to change. Even subtle reluctance can raise concerns.

In fast-moving environments, adaptability often matters more than tenure.

They assume they're safe

Confidence can morph into complacency. High earners may believe their track record speaks for itself — but during layoffs, silence can be misinterpreted as stagnation.

Those who don't actively and consistently communicate their value risk being underestimated.

Make your impact visible, tying your core activities to bottom-line impact.

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No self-advocacy

Many people believe their job value can't be quantified in dollars and cents, but fourteen years in marketing have shown me that any activity can be correlated to revenue.

If you're a secretary, show how forwarding sales leads 8% faster led to X% faster follow-ups and X% more deals closed per quarter. If you're a graphic designer, show how the improved layout increased customer retention and X% more sales revenue.

Make your impact visible, undeniable, and communicate it often. Don't wait for performance reviews or expect your boss to just notice.

Bottom line

As with workers of all salary ranges, high earners aren't necessarily being cut for performance reasons. They're often cut because they're costly, visible, and easy to quantify in a spreadsheet.

If you earn a top-tier salary in a hard-hit industry, now's the time to prepare. Preparation beats reaction (and panic).

Staying adaptable and living below your means enables you to build wealth so your finances can stomach a financial gut punch. In a volatile market, even the strongest performers need a powerful buffer.

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