HR leaders are uniquely placed to help prevent financial abuse during job cuts

Experts in economic abuse cases say HR leaders are uniquely placed to intervene when job cuts occur because employment loss is often the moment financial control either collapses or tightens, writes Dr Natalie Cummins.

Why job cuts create hidden wellbeing risks

Job cuts are increasing across multiple sectors as organisations respond to economic pressure, restructuring, and cost constraints. For HR leaders, the focus is often on consultation, compliance, communication, and fairness.

What receives far less attention is how job loss can intersect with financial abuse and quietly escalate risk for some employees.

Recent Australian research has highlighted the devastating and enduring impacts of financial abuse, including coerced business debt that can leave women facing bankruptcy, homelessness, and long-term economic harm. Financial abuse refers to patterns of behaviour that restrict, control, or exploit a person’s access to money and economic resources, such as preventing access to income or bank accounts, forcing someone to take on debt, or undermining their ability to work or earn independently.

These behaviours directly undermine financial wellbeing. They also tend to escalate precisely when other stabilising supports, such as employment, are removed.

What is rarely examined is how these two realities intersect. When employment ends during periods of relationship breakdown or financial pressure, job loss can remove the last source of financial autonomy for some women.

For HR leaders responsible for employee wellbeing, this represents a significant – and largely invisible – people-risk blind spot.

What experts see when employment disappears

According to a psychologist with extensive experience in economic abuse cases, job loss is one of the most dangerous inflection points for women experiencing financial control, and it is precisely the moment where HR decisions can change outcomes.

She describes how, when employment ends, women can lose not only income, but also confidence, social connection, and the practical ability to leave safely.

In one case, a woman living with her partner and two children had been planning her exit quietly. Her job was her only source of independence, emotionally and financially. When she was made redundant, her ability to leave disappeared overnight. Without an income, she could no longer support her children independently or afford legal representation. Three years later, she remains trapped.

In contrast, another case involved a young woman in a physically and emotionally violent relationship whose mental health had deteriorated significantly. When she disclosed her situation to HR, the response was compassionate and practical: six months of paid leave, time to leave safely, relocation support, and later redeployment closer to family.

The psychologist explains that the difference between these two outcomes was not the severity of the abuse, but the workplace response at the point employment was under threat.

Why HR leaders are uniquely placed to intervene during job cuts

HR leaders are uniquely placed because they control the timing, continuity, and conditions of job loss at the exact moment risk escalates, often without realising the impact of those decisions.

When workplaces respond with flexibility or continuity, women can exit safely. When income disappears abruptly, dependency deepens, and the risk of returning to the abuser increases.

Importantly, losing a job does not automatically destroy a woman’s legal position.

From a legal perspective, family lawyer Maria Valenzuela sees the same pattern play out once job loss has occurred.

Valenzuela is partner and accredited family law specialist at Hammond Nguyen Turnbull Lawyers and works extensively with women navigating separation where financial control is present.

“Independence – both actual and perceived is crucial to a woman leaving a financially abusive relationship,” Valenzuela explained. “A woman needs to feel empowered and able to pursue legal action if she needs to leave.”

When a woman loses her job during separation or while she is still deciding whether she can leave, that sense of empowerment can collapse quickly.

“She can feel trapped or without options,” Valenzuela said. “Where financial control already exists, job loss amplifies those feelings. If children or other vulnerable parties are involved, the pressure intensifies.”

Valenzuela emphasised that “the legal process itself should not be severely hampered by the loss of a job”. Options such as spousal maintenance or interim financial support often remain available.

“A frank conversation needs to happen quickly with a solicitor about funding and next steps,” she said. “Many options exist – the woman just needs to be guided through them.”

When job loss becomes a mechanism for financial control

Valenzuela regularly sees coercive control extend through job loss.

She describes situations where an ex-partner exploits the instability created by job cuts, offering financial support on the condition that the woman returns to the relationship.

“I’ve seen ex-partners say, ‘Come back – I can give you and the kids money,’” she said. “That forces a woman to choose between safety and being able to pay for accommodation, food or school costs.

“That is not a real choice. It is financial coercion.”

From an organisational perspective, job cuts may appear neutral. From a legal, safety, and wellbeing perspective, they can be the moment control quietly shifts back to the perpetrator.

4 practical actions HR leaders can take during job cuts

Experts are clear that this does not require HR leaders to diagnose abuse or demand disclosure. It requires recognising job cuts as a predictable wellbeing risk point and designing processes that do not unintentionally make harm worse.

1. Build safe opportunities to raise wellbeing concerns

Job-cut consultations can include a brief, confidential check-in that allows employees to flag wellbeing or safety concerns without explanation or formal disclosure.

2. Preserve financial continuity where possible

Extended notice periods, temporary pay continuation, delayed exits, or redeployment can preserve financial autonomy at a critical moment.

3. Activate referral pathways early

HR leaders should ensure referral pathways are ready, including lawyers experienced in financial abuse, counselling services, and specialist community supports.

4. Protect confidentiality and employee control

Sensitive information should not be recorded in general HR systems without explicit consent. Control over personal information is itself a wellbeing and safety issue.

Why this matters for HR leadership

When employment ends, HR leadership occupies a rare position: it may be the last professional contact an employee has before financial autonomy disappears. That moment can become a bridge that preserves options and wellbeing, not because HR leaders are obligated to act, but because they are uniquely placed to do so.

Experts say HR leaders are uniquely placed to help prevent financial abuse during job cuts

New research shows financial abuse causes long-term economic harm. Experts say that during job cuts, HR leaders may be uniquely placed to help protect employee wellbeing by preserving financial autonomy – often without realising it.

Dr Natalie Cummins is a lecturer in the Business School at the University of Technology, Sydney.