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First came the layoffs. Now, it’s time for paid leave. Employers are flexing their muscles — this time by shrinking paid leave, mainly maternity and paternity leave.
Two high-profile employers have already downsized their paid weeks of maternity and paternity leave. For instance, Zoom has reduced the number of weeks of paid parental leave it offers, while Deloitte is also planning to do the same — and more — for select groups of workers starting in January.
But what’s behind this move? What does this mean for employees?
Zoom and Deloitte cut parental leave
At Zoom, parental leave and other benefits are being scaled back. The American video-conferencing company has announced that birthing parents will get 18 weeks of paid parental leave, down from 22 to 24, and non-birthing parents will get 10 weeks, down from 16.
Meanwhile, Deloitte has also announced that starting January 1, 2027, it will scale back several core employee benefits for a segment of its workforce. Paid family leave will drop from 16 weeks to eight weeks for affected employees in departments such as administrative services, information technology, and finance.
It also looks to axe the $50,000 reimbursement for adoption, surrogacy, and IVF treatments. The company has also announced that PTO (Paid Time Off) will decrease by five to 10 days for many employees.
When asked about the changes, Zoom declined to comment, whereas a Deloitte spokesperson told Business Insider that its US business is updating its talent structure to better reflect employees’ diverse skills and the work they do for clients.
And this trend isn’t restricted to just these two firms; earlier, Hulu and some small to midsize companies also trimmed weeks off their benefits for new parents.
The cuts have undoubtedly caused anxiety among employees. Devon Richey, a viewer-experience agent with Hulu, previously told the Wall Street Journal that parental leave was on his mind as he and his wife weighed the costs of having a child. This came after the Walt Disney-owned streaming service shrunk its fully paid parental leave to eight weeks from 20. With less paid paternity leave offered now, Richey noted that he would need to begin paying for full-time child care sooner. “If my job is cutting back on my parental leave, how am I going to afford child care if I don’t get paid more?” he said.
Other employees have also expressed concern over their parental leave being cut. Some noted on LinkedIn that the cut sounded like a reason to “boycott” such companies. Others worried that the cuts would harm women in the workplace.
Reasons for companies shrinking parental leave
Companies paring back such benefits have raised eyebrows. After all, a 2026 MetLife survey of 2,550 full-time US employees revealed that paid parental leave, vacation, and disability leave are the perks coveted most by workers.
And Laszlo Bock, former Google head of human resources, has warned that such moves are only the beginning, with more companies deciding to roll back their paid parental leave benefits, and possibly vacation time, too. “It legitimises that action for everybody else,” Bock was quoted as saying.
But what’s driving companies to make such moves?
There are a number of factors contributing to this situation. Firstly, the US job market is sluggish. Data from the Bureau of Labour Statistics reveal that only 1.9 per cent of US workers quit their jobs in February, down from the previous two per cent.
Unhappy employees are staying put in their jobs — in a shaky economy and tight job market, many employees consider themselves lucky to have a job at all. And employers are using this to their benefit to rein in their costs. “If they feel that they can improve the profitability of the firm by getting rid of some of these benefits, they will,” Josh Bersin, a human resources analyst and consultant, told Business Insider. “It’s definitely better than layoffs.”
Other factors contributing to this trend of paring back parental leaves are increased performance expectations and the shift to AI in managing workflow. As more companies are using AI, there’s a slowdown from clients, and hence, companies are looking to save any costs they can.
The harmful impact of trimming benefits
However, while companies may see benefits in trimming parental leave, experts warn that this could have an adverse effect. It could lead to a decrease in employee productivity.
Christopher Myers, director of the Center for Innovative Leadership at the Johns Hopkins Carey Business School, told Business Insider: “They could respond instead by putting less effort into their jobs, which could dent productivity.”
Jamie Shapiro, an organisational psychologist and CEO of the executive coaching company Connected EC, was also quoted as telling Fortune, “Anytime we have an abrasion of justice, we are going to see lower motivation of our employees because we want things to feel fair.”
“When I’m somebody who’s on the front line, do I feel like my organisation is being fair to me? And if the answer is no, then that can hurt motivation, and it can hurt not only the culture, but it can also hurt how much I feel invested in the organisation,” she said.
Such moves could also hurt the companies’ reputation in the long term, experts have warned.
It’s left to be seen what comes next. For now, it seems that the power has swung toward employers, and workers are having to pay the price for it.