Getty Images; Alyssa Powell/BI
- Companies are replacing lower-performing workers with stronger talent to boost performance.
- It’s one way businesses are optimizing their workforces as hiring budgets tighten.
- The trend is playing out from early-career roles to the C-suite.
With hiring budgets constrained, some companies are finding a different way to bring in talent: replacing workers with better ones.
"There is just no appetite for mediocrity anymore," said Brent Orsuga, founder of the supply chain and logistics recruiting firm Pinnacle Growth Advisors. Over the past year, he's seen many of his clients quietly replace employees rather than grow headcount.
"Everyone was looking at what they have and being like, 'I want the best of the best,'" Orsuga said.
Take the example of a company with 10 sales reps that is looking to boost performance, he said. They could expand the team. But it's often more affordable to identify the lowest-performing reps and replace them with better ones — even if the new employees cost a bit more.
While upgrading isn't new, Orsuga said that 2025 was the biggest year he's seen for the trend in more than two decades in the recruiting world. He calls it "bullseye hiring."
"It's like every seat matters, so I've got to hit a bullseye and get the right person in the right seat," he said.
Hiring has slowed in the US recently, due to economic uncertainty, cost-cutting, and AI adoption. In February, the hiring rate fell to 3.1% — a modern low matched only by the pandemic and early recovery from the Great Recession. Three recruiters across tech, marketing, and logistics said that when companies do hire, it can come at the expense of an existing employee.
One of the driving forces behind the shift, which they said is playing out from early-career roles to the C-suite, is a push to maximize every dollar spent on talent as hiring budgets tighten.
You need to do a "great job" — not a "good job"
Many clients looking to upgrade existing employees turn to confidential searches, said Lindsay Myketey, a recruiter at Cella by Randstad Digital who focuses on mid- to senior-level marketing and technology roles.
She said that as roles evolve, companies may replace workers for several reasons, from underperformance to gaps in skills, including those related to AI. She added that many managers are taking on more responsibilities, and that companies might replace those who can't keep up. Sometimes, she said, employees are moved into different roles rather than let go.
How replacement searches happen can vary by role and level. For senior roles — typically those paying at least $100,000 annually — Orsuga said companies might use headhunters to conduct confidential searches instead of publicly posting the role, adding that this helps avoid "spooking" the employee they're looking to replace.
For mid-level roles, he said companies use a mix of headhunters and job postings. Some are required to post roles externally for compliance reasons, he said, and because many employees share similar titles, a new posting can signal growth rather than a looming replacement. Orsuga added that some companies are "always hiring" — bringing on new talent not necessarily to grow headcount, but to replace lower-performing workers over time. That dynamic can disproportionately affect early-career workers, who may find themselves competing with annual cohorts of new graduates.
In some cases, Orsuga said, high-performing employees are cut because they're too expensive. He compared it to the sports world, where many teams operate under a salary cap. There's only so much money to spend, and sometimes that means moving on from a talented, highly-paid player.
Workers are feeling the pressure
For workers across the economy, layoffs remain low relative to historical levels. But Myketey said people shouldn't overlook the risk of replacement — and being pushed into a challenging job market.
"Even when you have the job, you really need to make sure you're operating at a high level, like on the 'good list,'" she said.
Some workers said there were warning signs that their future at the company could be in jeopardy.
In 2024, Nicholas Jenkins, then a program manager at Amazon, landed under new management following a reorganization. He said the new arrangement didn't feel like a great fit, though he initially wasn't too concerned.
"I thought my work was critical and that, for the most part, the quality spoke for itself," said Jenkins, who is in his 40s and lives in Texas.
Jenkins said that in mid-2024, managers began raising concerns about his performance. Around October, he was formally placed on Amazon's "Focus" performance-improvement program.
"At that point, I was like, 'I've got to get out of here,'" he said. "This is too stressful."
By the end of the year, Jenkins had accepted a termination package that included a few months of severance pay.
But for workers who were never placed on a PIP — and were blindsided by layoffs — it's often unclear how much their performance factored into the decision to cut them.
Last year, Oscar Cecena Fujigaki, then a customer success manager at LinkedIn, suspected layoffs could be coming — but he was confident he'd be fine. Then, in May 2025, he learned he'd lost his job.
"I was shocked to be affected," said Fujigaki, who's in his 40s and lives in Toronto. "Based on our performance metrics, my understanding was that I was doing well."
After initially delaying his job search to focus on a personal project, Fujigaki said he set out to land a higher-paying role than his previous position, which paid about $114,000 a year. But the market proved far more challenging than he expected.
During the early stages of his search, Fujigaki said he took comfort from his belief that the layoff had little to do with his individual performance.
"Layoffs are business decisions made by people who don't even know your name or situation," he said.