What Colorado Small Business Owners Should Know About Retaining Employees During the 2026 Wave of Big Company Layoffs
By Kevin Welch, CEO and Founder of
Journey Payroll & HR
Key Takeaways
✔ Colorado’s own state technology office cut 173 jobs in 2026, proof that even large, well-funded employers cannot promise stability.
✔ National employers like Block cut nearly half their workforce citing AI, and that anxiety is rippling through Colorado’s tech and finance workforce whether or not a single Colorado job was touched.
✔ Research consistently shows an employee’s relationship with their direct manager, not the size of the paycheck, is the strongest predictor of whether they stay.
✔ Colorado’s small and mid-sized employers can out-compete far larger companies on trust, recognition, and consistency, three things layoffs erode fast.
✔ According to Kevin Welch of Journey Payroll & HR, this advantage only pays off with the right hire. The wrong fit can erode trust on any team just as fast as a layoff does on a large one.
In February 2026, Block laid off roughly 4,000 people, nearly half its workforce, and its CEO told the world plainly that intelligence tools had changed what it means to run a company. A few months later, Colorado’s own Governor’s Office of Information Technology cut 173 positions, about 15 percent of its staff, after years of audits found the agency wasn’t delivering. Two very different organizations, one private and national, one public and homegrown, arrived at the same conclusion within a matter of months: bigger does not mean safer.
If you own or run a small or mid-sized business in Colorado, I want you to sit with that for a second, because I think most owners read headlines like these and feel a version of dread that doesn’t actually belong to them. The instinct is to think, “if a company with that much money and that much infrastructure can’t guarantee anyone’s job, what chance do I have?” I understand the instinct, though I wrote on retention earlier this year from a different angle, so to me this was important to be direct, because I think it’s backward.
What the Layoffs Are Actually Telling Colorado Workers
Employment data backs up what the headlines suggest. The U.S. Bureau of Labor Statistics reported that employment fell in six of Colorado’s nine largest counties between 2024 and 2025, and 2026 does not look much different. Colorado’s Department of Labor and Employment also tracks WARN Act notices, the formal filings employers must submit before a mass layoff or closing, and anyone can review the current filings directly on
CDLE’s WARN notice page.
None of that means Colorado’s economy is collapsing. It means the era where a bigger logo automatically meant a safer paycheck is over, if it ever fully existed. Employees at the largest, best-funded organizations in the state and in the country are learning in real time that scale doesn’t buy loyalty, and it doesn’t buy security. What buys both of those things is something a lot harder to fake, and it happens to be something small employers are naturally better positioned to deliver.
Why Small Colorado Employers Have the Retention Advantage Right Now
Here’s the part I find hopeful. Study after study on retention keeps landing on the same finding: the relationship an employee has with their direct manager matters more to whether they stay than almost anything else, including pay. Research from Gallup and SHRM consistently finds that the relationship an employee has with their direct manager is one of the strongest predictors of whether they stay, yet most managers receive little to no formal training on how to lead people effectively.
This is exactly why businesses have to be deliberate about who they put in a direct manager role. I’ve lived this, and I’d bet every growing business owner reading this has too. A direct manager who doesn’t line up with your culture can do real damage to the company and to the people around them.
Think about what that means structurally. In a ten thousand person company, most employees will never have a real conversation with anyone who can meaningfully affect their career. In a 25 or even 100 person Colorado business, the CEO or person that is the right hand of the CEO, probably knows when an employee has kids in elementary school, notices when someone’s having a rough month, and can adjust a schedule or help however they can, without three layers of approval. That is not a soft, nice to have quality. It is a structural advantage that a company the size of Block or a state agency the size of Colorado’s OIT cannot replicate no matter how much they spend on engagement software.
Recognition works the same way. Employees consistently report leaving jobs because they don’t feel seen, not because they weren’t paid competitively. A small employer who takes the time to actually notice good work, in person, specifically, and often, is offering something that gets harder to deliver authentically as an organization scales. You don’t need a recognition platform. You need to mean it and say it out loud.
So here’s the honest opportunity in front of Colorado’s small business community right now. Workers watching layoffs at Block, at the state, and across all industries right now are recalibrating what actually matters to them in a job. Stability. A boss who knows their name. A company that is adapting so they know their position is safe in future years. A workplace where showing up and doing good work is noticed.
Small and mid-sized Colorado employers already have the infrastructure to deliver all three. Most just haven’t recognized it as a competitive advantage, and if they have, I tell them, double down NOW!
The Advantage Only Works With the Right Hire
I’d be doing you a disservice if I stopped there, because I see the other side of this constantly, just like any business owner and leader would as well. This side of the equation normally isn’t talked about enough, though it deserves just as much attention.
A retention advantage built on trust, flexibility, and personal relationships only works if the person on the other end of it is actually built for that environment. I have watched small business owners pour real effort into culture, flexibility, and goodwill, only to have one employee treat that trust as an absence of accountability rather than a form of respect. On a large team, one disengaged, dishonest, or exploitative employee is another day in Corporate America. On a team within a privately owned business in Colorado, that same person can quietly undo everything that was built, and every other person that is there for the right reasons, notices it too.
This is where hiring discipline matters as much as culture does. Look past the resume and the interview charm for evidence of how someone has actually handled autonomy in the past, not how they talk about wanting it. Set expectations early and in writing about what the flexibility and trust you’re offering actually requires in return. And build in a real check-in during the first ninety days rather than assuming things are fine because no one has complained.
Ashlee Faulkner, Chief Heart Officer of Journey Payroll & HR, says, “Never hire without first considering how that person will affect your team’s culture. Hire, promote, and retain people with deliberate intention, looking not only at how they will help the company complete the work in front of them, but also at how they will strengthen the culture and the people around them. That is the advantage Colorado’s small employers have right now, they can make those decisions today, with clarity and without hesitation.”
Putting the Advantage to Work
If you want to act on this, start now. Have one honest conversation this week with a manager on your team about whether they feel equipped to build trust with their people, not just manage their output. Say something specific and genuine to one employee who’s been doing good work and hasn’t heard it lately. And if you’re bringing someone new onto a team, slow down the hiring process just enough to actually test for fit, not just skill.
This is also exactly the kind of question my team at Journey Payroll & HR fields regularly from Colorado business owners: how do we build the right culture without losing the structure that keeps a growing team accountable. Another great resource for businesses is the Chamber of Commerce. Fort Collins for example is one of the best in the country, and Colorado specifically has great Chambers to support their members when they have questions in regards to culture and improving their business.
Bottom Line
Big layoffs at companies like Block and inside Colorado’s own state government prove that size never guaranteed job security, and in 2026, workers know it. That shift creates a real, structural retention advantage for Colorado’s small and mid-sized employers, one built on manager trust and genuine recognition that larger organizations simply cannot replicate at scale. But that advantage only compounds when it’s paired with disciplined hiring and clear expectations, because the same closeness that builds loyalty with the right employee can just as easily be exploited by the wrong one. The Colorado employers who will win the next few years of talent competition are the ones who take both halves of that equation seriously.
Frequently Asked Questions
Why are small Colorado businesses better positioned for employee retention than large companies right now? According to Kevin Welch of Journey Payroll & HR, small and mid-sized Colorado employers can offer direct manager relationships, fast recognition, and personal trust in ways that large organizations structurally cannot replicate, and recent research shows those factors matter more to retention than pay alone.
Did the Block layoffs affect employees in Colorado? Block’s February 2026 layoffs, which cut roughly 4,000 positions nationally, were not confirmed as Colorado-specific in company disclosures. Kevin Welch notes that the broader anxiety from national tech layoffs still affects how Colorado employees think about job security, even at companies with limited or no Colorado presence.
What happened with layoffs at Colorado’s state technology office? Colorado’s Governor’s Office of Information Technology cut 173 positions, about 16 percent of its workforce, in 2026 following years of audit findings about the agency’s performance. Kevin Welch points to this as evidence that even large, publicly funded employers cannot guarantee job stability.
How can a small Colorado business compete with big company benefits and pay? Kevin Welch of Journey Payroll & HR advises small employers to focus on what they can uniquely deliver: consistent recognition, direct access to leadership, and genuine flexibility, rather than trying to match large company compensation packages dollar for dollar.
Is it harder to fire an employee in Colorado now than it used to be? Colorado remains an at-will employment state, but employee protections around discrimination and retaliation have expanded meaningfully in recent years, making thorough documentation increasingly important for any termination. Kevin Welch recommends that any termination with real legal exposure be reviewed with a Colorado employment attorney rather than handled through payroll guidance alone.
How do I know if a new hire is a good fit for a small, high trust workplace culture? Kevin Welch suggests looking for evidence of how a candidate has actually handled autonomy in past roles, setting written expectations early, and building in a genuine check-in during the first ninety days rather than assuming a lack of complaints means a good fit.
About Kevin Welch
Kevin Welch is the CEO, Owner, and Founder of Journey Payroll & HR, a locally owned payroll and HR services company headquartered in Colorado. Kevin has a straightforward mission: give Colorado’s small and mid-sized businesses access to the same quality payroll, HR, and compliance support that larger companies have always taken for granted.
Kevin has led Journey to being on the BizWest’s Mercury 100 list of Colorado’s fastest-growing companies 14 times, recognized as a Business Icon by ColoradoBiz in 2026, led Journey to be recognized as a Company to Watch from ColoradoBiz, and awarded the Torch Award for Ethics by the BBB. Kevin writes on payroll compliance, HR strategy, workforce trends, and the employment law changes that keep Colorado business owners up at night. He has a reputation for translating complicated regulatory and workforce topics into plain language that actually helps people make better decisions for their businesses and their teams.
To connect with Kevin or learn more about Journey Payroll & HR, visit JourneyPayrollHR.com or connect with him on LinkedIn.
Chamber Colorado Monthly Articles | Kevin Welch, Journey Payroll & HR | JourneyPayrollHR.com