What Is a Hiring Freeze?

Hiring Freezes Explained

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Updated on November 18, 2022

Three people are in a conference room for a work meeting — Photo:
Thomas Barwick / Getty Images

Definition

A hiring freeze is when employers stop filling open positions at the company. They may pause hiring temporarily or indefinitely. For the duration of the pause, the employer will stop creating new roles.

Key Takeaways

Hiring freezes occur when employers cease to create new roles or fill open jobs.
Hiring slowdowns happen when economic conditions are unfavorable, such as during a recession or business downturn.
Job seekers and employees are affected by hiring freezes in different ways, including fewer opportunities, rescinded job offers, and reduced career growth.

How Hiring Freezes Work

A hiring freeze happens when employers press pause on recruiting new employees and filling open roles. The freeze may be an alternative to layoffs and furloughs or in addition to reductions in staff. The company may also undertake other cost-saving measures like restricting raises, canceling bonuses, or reducing benefits and perks.

Typically, employers institute hiring freezes when business is flat or in decline. However, companies may also use hiring freezes to protect profits even when business is relatively stable.

Note

You may also experience a hiring freeze if the general economic environment declines, even if the employer has yet to experience an impact.

Examples of a Hiring Freeze

In 2022, Facebook's parent company Meta instituted a hiring freeze across most teams in the wake of a decline in quarterly revenue and profits. The New York Times reported that the hiring freeze would affect engineers and some data scientists. In addition, Meta CEO Mark Zuckerberg announced reduced budgets and staff cuts.

Other tech companies froze hiring, laid off workers, or otherwise reduced expenses in 2022. For example, Coinbase rescinded job offers and Amazon announced a hiring freeze and layoffs.

How Do Hiring Freezes Affect Workers?

Hiring freezes have impacts on workers that go beyond the obvious issues of fewer job openings to choose from and smaller teams to achieve company goals.

Impacts on Job Seekers

Job offers rescinded: During a hiring freeze, employers may rescind job offers that they’ve extended to candidates and would otherwise honor. This is generally legal. In most cases, a company can rescind a job offer for any reason—or no reason at all.
Fewer opportunities: Multiple hiring freezes across employers may mean fewer job choices if you're looking for a new role.
Less power to negotiate: If enough companies in your industry institute hiring freezes, you may find yourself with reduced negotiation power. Over time, this can lead to lower wages and slower career growth.

Impacts on Employees

Stalled promotions: Although not every hiring freeze is absolute, many employers will also freeze promotions and transfers, as well as new hires.
Stagnant career growth: Lack of mobility within organizations means fewer chances to build your career path internally. You may also have fewer opportunities to learn new skills or work with other teams, which could have a negative effect on your career trajectory.
Increased job stress: When companies cease filling open roles, remaining employees often wind up with increased workloads. This can make it harder to achieve your team’s goals and make work more challenging and less rewarding for everyone.

How To Prepare for a Hiring Freeze

Although you can’t always predict a hiring freeze, there are a few ways you can prepare for one.

Look for the Signs

Employers are more likely to institute hiring freezes and other cost-cutting measures in times of economic difficulty. So, if you know that your company is having liquidity problems or is undergoing restructuring, it’s reasonable to expect a hiring freeze. The same goes for economic crises like recessions. The bottom line is when business is slow, so is hiring.

Note

If your employer has 100 or more full-time employees, it may be covered under the provisions of the Worker Adjustment and Retraining Notification (WARN) Act. Covered employers must notify workers 60 days before a plant closure or mass layoff. Although hiring freezes are not covered by this legislation, the WARN Act could provide you with a heads-up that the business is in trouble.

Keep Your Resume Ready

Regardless of the economic environment, it’s always wise to keep your resume updated and your professional network strong. Take a few minutes to update your skills, remove old positions, and refine the formatting.

Upskill

If you had to look for a job tomorrow, would your skill set be ready? Look at job openings in your field and note the required and desired skills. Fill any gaps by upskilling with online classes, certifications, or self-study.

Don’t Panic

Job searching can be stressful, no matter your situation. However, if you’re looking for work due to a possible hiring slowdown at your current employer, you’re ahead of the game. By keeping your options open, you’re ensuring that you’ll have better choices. And that’s the best way to keep your career going strong.

Hiring Freezes vs. Layoffs

Hiring Freeze	Layoff
A sudden pause in recruiting and hiring new employees	Employees are suddenly terminated from employment
Open positions aren’t filled for a period of time	A layoff may be temporary or permanent
Current employees may have a promotion put on hold	Large companies may be required to provide advance notice
Raises and bonuses may be limited to save money	Layoffs often occur as a cost-cutting measure

Frequently Asked Questions (FAQs)

How long do hiring freezes usually last?

A hiring freeze typically lasts a few months (like three to six months, for example) but may extend longer during a recession or economic downturn that impacts business. Generally, a longer hiring freeze will be accompanied by other cost-cutting measures like layoffs, furloughs, or other reductions in spending and workforce.

What does it mean if a job is on hold?

When employers tell job seekers that a job is on hold, it often means that they are not filling the role at this time due to a hiring freeze, restructuring, impending layoff, or something else. However, it can also mean that the hiring manager has decided to offer the job to an internal candidate or a different external candidate.

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Sources

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

University of Washington Human Resources. "Cost-Saving Strategies."
The New York Times. "Meta Will Freeze Most Hiring, Zuckerberg Tells Employees."
Coinbase. "Update on Hiring Plans."
Amazon. "A Note From CEO Andy Jassy About Role Eliminations."
The National Law Review. "Can an Employer Legally Withdraw a Job Offer after It’s Been Made?"
U.S. Department of Labor. "Worker's Guide to Advance Notice of Closings and Layoffs," Page 2.