Leading through the anxiety economy

There is a particular kind of quiet that falls over organizations during periods of prolonged uncertainty. It isn’t peace. It’s the silence of people calculating.

In 2026, that silence has settled across much of the American workplace. Over 150,000 tech jobs have been eliminated since January alone. Rolling layoffs — what Glassdoor researchers have termed “forever layoffs” — have replaced the large, headline-generating cuts of previous years. Instead of one painful announcement, organizations are producing a steady, low-grade stream of uncertainty: another team restructured, another role “eliminated,” another round of “we’re optimizing.”

For the people still employed, this isn’t relief. It’s chronic vigilance. And chronic vigilance is one of the most expensive psychological states an organization can produce.

The Data Behind the Fear

Gallup’s 2025 State of the Global Workplace Report found that employee engagement has fallen to its lowest level in more than a decade — just 31% of American workers report feeling engaged with their role and organization. Simultaneously, 50% of North American workers report experiencing significant stress on any given day.

Glassdoor’s research found that after a layoff, negative sentiments from remaining employees take more than two years to recover. Repeated layoffs have double the impact: the biggest drops in sentiment occur among the employees organizations most need to retain — key talent, managers, and newer hires.

The impact on organizational capability is concrete. Gallup’s research shows that managers account for 70% of the variance in team engagement — and when managers are themselves operating under fear and uncertainty, that anxiety cascades directly to everyone they lead. In 2024, only 27% of managers worldwide felt engaged in their own work. That number has not meaningfully recovered. In an era when every organization is pressing for transformation through AI, a workforce operating under chronic fear becomes progressively less capable of delivering it.

This is not a culture problem. It is a business problem with a culture cause.

“Disengagement isn’t a soft metric. It’s a hard cost — measured in lost productivity, eroded trust, and the quiet departure of the people you most need to stay.”
— DILAN Consulting Group

What Fear Does to Organizations

When people are afraid, they do not suddenly become lazy or disloyal. They become strategic about their survival. And in a fear-based culture, survival requires very specific behaviors that look, from the outside, like engagement — but function, on the inside, like anything but.

People in fearful organizations attend meetings but don’t speak freely. They say yes to things they have no intention of delivering. They avoid raising problems because surfacing a problem might make them look like the problem. They protect information because information is leverage. They invest energy in being visibly busy rather than genuinely productive.

Forrester Research describes a growing segment of employees it calls “coasters” — workers who are disengaged but not leaving, who have quietly withdrawn their discretionary effort while maintaining the appearance of compliance. By their 2026 projections, this group is expected to represent nearly 28% of the workforce. One in four of your people may be fully present in body and almost entirely absent in spirit.

Gallup’s data makes the cascade explicit: managers account for 70% of the variance in team engagement. When managers are themselves afraid — worried about their own positions, unsure of their standing, operating without clear direction — that fear flows directly to their teams. In 2024, only 27% of managers worldwide felt engaged. That number declined further in 2025. Disengagement doesn’t stop at the manager’s door.

Is Fear Running the Culture? Read Each One Carefully:

  • People rarely disagree with leadership in group settings.
  • Problems tend to surface late — after they’ve already become expensive.
  • High performers have become noticeably quieter in the last six to twelve months.
  • Your best people are not raising their hands for stretch opportunities.
  • Meetings are well-attended but generate little genuine debate.
  • You’re hearing about important issues through informal channels, not formal ones.
  • People seem to know about organizational changes before leadership has communicated them.
  • Turnover among your strongest performers has increased, even in a tight job market.

If this sounds familiar, you are not managing a performance problem or a communication problem. You are managing the organizational consequences of unprocessed fear. And those consequences compound over time.

What Leaders Get Wrong

The most common mistake leaders make in a fear-based culture is doubling down on performance management. More metrics, tighter oversight, clearer consequences. The logic seems sound: if people are disengaged, hold them more accountable.

But fear and accountability are not in opposition to each other — they are on a spectrum, and where you land on that spectrum determines whether accountability produces results or paralysis. Harvard’s Amy Edmondson, whose decades of research on psychological safety have reshaped how high-performance teams are understood, describes this directly: without psychological safety, what organizations get is not accountability but “the illusion of accountability.” People perform compliance while withholding the honest effort, the creative risk, and the candid feedback that actually drive organizational performance.

The second mistake is silence. Leaders who are themselves uncertain — who don’t know what the next quarter holds, who haven’t received clarity from their boards or investors — often go quiet. The instinct is to protect people from worry. The effect is the opposite: people fill silence with catastrophe. A leader who says “I don’t know what the next six months will bring, but here is what I do know, and here is what I am committed to” is infinitely more stabilizing than one who communicates only when they have certainty.

“What psychological safety really means is: I can do my job without fear of humiliation or punishment. That isn’t softness. It’s the condition for actual performance.”
— Dr. Amy Edmondson, Harvard Business School

What Leading Through Fear Actually Requires

The leaders who hold culture together during periods of organizational anxiety share several practices that are deceptively simple and profoundly difficult to maintain consistently under pressure.

They communicate honestly and frequently, even when the news is incomplete. They model the emotional regulation they want to see in their teams: not suppressing difficulty, but also not amplifying it. They create regular spaces where people can ask real questions and receive real answers. They protect the cultural norms — candor, feedback, psychological safety — that tend to get abandoned precisely when they are most needed.

And they do not confuse the absence of complaints with the presence of trust.

The Gallup data on wellbeing tells the same story in different language. By the end of 2025, for the first time in the sixteen years Gallup has tracked worker wellbeing, more American workers described themselves as struggling than as thriving — 49% to 46%. Burnout and fear share the same organizational soil. They do not stay contained to the individual. They reshape how teams communicate, how decisions get made, and what people are willing to risk.

At DILAN Consulting Group, we work with leadership teams navigating exactly this moment — not to manufacture optimism, but to build the kind of honest, grounded, human leadership that earns trust in uncertain times. Fear is not the absence of courage. It’s the invitation to lead more humanly. Business is Human®.

References

Edmondson, A. C. (2018). The fearless organization: Creating psychological safety in the workplace for learning, innovation, and growth. Wiley.

Forrester Research. (2025). Predictions 2026: The future of work. Forrester.

Gallup. (2025). State of the global workplace 2025. Gallup Press.

Gallup. (2026, March). U.S. worker wellbeing: Struggling surpasses thriving for first time. UPI/Gallup.

Glassdoor. (2025, November). 2026 work trends: Forever layoffs and what they do to culture. Glassdoor Economic Research.

UPI. (2026, March 24). Gallup poll: U.S. workers struggling at record levels, engagement at decade low.