Why companies are rescinding job offers
Share on Linkedin
(Credit: Getty Images)
Some workers are accepting job offers, only to see them revoked before their start dates. What’s going on?

After a long recruitment process, Michael, 25, finally received an offer to work for a Toronto-based tech start-up in May. When the contract was sent over, it mentioned there would be a series of benefits for employees who passed their probationary period. All that was left was for Michael to sign on the dotted line, and forward his references. 

“The contract was vague,” explains Michael, whose surname is being withheld for career concerns. “So, I later sent a thank-you email, and asked about the specific benefits I would receive, alongside follow-up questions to do with my progression at the company.” 

Michael’s intention was to provide his references once his prospective employer replied with details. That email arrived a day later, but it contained some unexpected news. “It was a short, simple email from the CEO stating they had decided to go in a different direction – they were rescinding the job offer,” he says. “I’m still in disbelief.”

Communications ended there: Michael was ghosted as if the position had never existed. With no explanation from the employer, Michael says he couldn’t help but speculate. “My first thought was [it happened] because I hadn’t provided references right away, that I didn’t initially email back immediately or that I’d asked too many questions.”  

Michael still doesn’t know if the job offer was rescinded because of a change of heart by the employer, whether another candidate took the role, or if market conditions meant the position was no longer vacant. But he’s far from being the only person to have had a job offer revoked in recent months. 

Amid a slowdown in industries such as tech, some firms have begun scaling back their recruitment, either through hiring freezes or layoffs. Accounts proliferate of workers who thought they had their new role secured, only to have it withdrawn at a late stage. While Michael had yet to hand in his notice to his then-employer, some workers have even found themselves unexpectedly caught between roles, having quit their current job only to hear their new role has fallen through just days before their start date. 

If job offers can be withdrawn, where does that leave workers – and are there steps they can take to safeguard themselves until they actually get a foot in the door?

‘It’s hard to contain the collateral damage’

Candidates might assume that once an email offer is received, with paperwork to follow, the new role is theirs. However, offers can still fall through – including even after both sides sign the contract.  

Typically, companies can withdraw an offer if a candidate fails a background or reference check. There might also be a very rare case in which, as Michael worried, a candidate somehow made a wrong move right at the final hurdle, leading to a change of heart by the company. Right now, however, there is wider economic context driving this trend. 

It was a short, simple email from the CEO stating they had decided to go in a different direction – they were rescinding the job offer. I’m still in disbelief – Michael

One factor has been the crypto and tech slowdown. Growth companies, which had been operating at full tilt for the past two years, have had to abruptly slam on their hiring brakes over fears of a looming recession. “The pace these firms have is enormous, so the machinery of recruitment has to be at full steam,” says Ivar Wiersma, head of computing platform Conclave, based in the Netherlands. “When it has to change course so suddenly, it’s hard to contain the collateral damage: offers are still being made before the hiring can be stopped.”

Other industries that have been on a recruitment drive in the wake of intense pandemic-driven demand have experienced similar whiplash. US data from company-reviews website Glassdoor, seen by BBC Worklife, shows a surge in posts mentioning the rescinding of job offers: a 217% increase between January and July 2022. “Many companies that staffed up quickly are having to reduce size very quickly,” explains Charley Cooper, the chief communications officer at enterprise technology provider and blockchain software company R3, based in New York City. “That turns into layoffs, hiring freezes and, in the most extreme cases, rescinded offers.”

Revoking job offers is generally seen as a last resort: it implies a company’s business outlook has changed so dramatically that it has to reverse hiring plans made only weeks before. “If a company is rescinding job offers, it indicates that it has no other option for economic wellbeing or survival,” says Cooper. “It speaks to an employer’s depths of concerns not just today, but also longer term: they likely wouldn’t feel the need to revoke accepted offers if they thought there would be a quick bounce-back.”

Some workers report job offers being rescinded by simple emails – which can be very frustrating, to say the least (Credit: Getty Images)

Some workers report job offers being rescinded by simple emails – which can be very frustrating, to say the least (Credit: Getty Images)

‘The more I thought about it, the angrier I became’

While withdrawing an offer can be the right decision for an employer, it can feel like a body-blow to the candidate, who may well have made life choices around the new role. 

A lack of explanation by an employer can leave rejected workers reeling even further. “The more I thought about it, the angrier I became,” says Michael. “I invested so much time and energy over several rounds of interviews, yet all I received was a generic email telling me they were taking the offer back.” 

The later the withdrawal comes, the worse the situation can be for the candidate who is suddenly cut adrift. “You have people about to begin a role often after having quit their last job, having relied upon the representations made by a business,” says Cooper. “It should be an exciting time for them, beginning a new opportunity. To then suddenly receive a call saying, ‘I’m sorry, don’t actually bother showing up on Monday’ is a real blow.” 

Without a signed contract, as in Michael’s case, an offer can be withdrawn at the employer’s discretion. But even when formal terms have been agreed, workers have limited recourse should a company decide to back out.

Much of what we’re seeing is happening in tech, meaning many of those currently suffering are people earlier in their career who are just getting started – Charley Cooper

While a signed contract implies a worker has certain guarantees in terms of employment, this isn’t the case in practice: an employer can withdraw an accepted offer at any time, and not have to explain why. In the US, a company has no legal obligation to pay a would-be employee anything. In the UK, a worker is only entitled to the pay set out in the notice period. “It’s possible for a job offer to be rescinded because the employer’s needs have changed,” explains Rebecca Thornley-Gibson, partner in the employment team at law firm DMH Stallard, based in London. “But the employer wouldn’t need to provide any reason for doing so.”

Cooper believes that the current spate of withdrawn job offers skews towards younger workers, with a potential knock-on effect for their career progression. “Much of what we’re seeing is happening in tech, meaning many of those currently suffering are people earlier in their career who are just getting started. If they’re getting a job rescinded from one employer, there may not be too many other companies looking for people either.”

Leaving a ‘bad taste’

When companies are forced to revoke job offers, Cooper says that communication is key to easing a difficult situation. “It sits on employers and executives to be honest and transparent, and make a strong case as to why they’re taking drastic action in the broader economic climate.” 

If employers don’t manage to explain themselves adequately, aggrieved candidates may be more likely to publicise the revoking of a job offer online, creating a long-term hit for a company’s recruitment and retention. “Rescinding offers ultimately leaves a bad taste in the mouth of the talent you may want to hire in the future,” says Cooper. “If you're a young up-and-comer choosing between two companies, and one has a history of withdrawing offers, that will cause some level of anxiety: you don’t know how reliable the company will be going forward.” 

In many cases, employees who have recently had a job offer rescinded have been at the mercy of market conditions. Cooper notes that even well-structured companies may not always be able to fully prevent the effects of downturns. “There will always be a set of economic circumstances that come along and catch even the most thoughtful people out.”

It’s unclear how long the current trend of rescinded offers will last, but regardless, Cooper emphasises workers who fall victim to it are blameless. “It’s not the person’s fault: that’s to do with a company recruiting way too fast for roles it may or may not need in an economic climate that’s uncertain. Unfortunately, that’s where workers get hurt.” 

In the end, Michael – who’s since changed roles – says he has come through his experience relatively unscathed. “I’m glad they rescinded the offer in the end: I tried to be as honest as I could through the recruitment process, and they really didn’t even try to return that level of respect.”