High anxiety about job-cuts in the workplace is fueling inter-office rumors, gossiping and eavesdropping, according to a recent survey by the Society for Human Resource Management.

Of 494 human-resource professionals surveyed, nearly 1/4 reported that they had encountered significantly more cases of eavesdropping in the workplace over the past year. More than half of the respondents had also noted an increase in gossip and rumors about downsizing and layoffs within their companies.

"Everyone is on guard, and they have their ears perked up for any information that may give them a sense of clarity about what's going on at their organization," says Evren Esen, survey manager at the Society for Human Resource Management. "Because people feel threatened and scared, they're more likely to do things they wouldn't normally do," she says.

Some snooping activities include listening in on closed-door meetings, peeking at confidential e-mails or sharing second-hand information with co-workers.

Although difficult to resist, this kind of water-cooler banter can turn ugly, says Esen, especially when false messages circulate. Leaked news of upcoming layoffs can dampen morale and foster distrust. And besides creating an unpleasant working environment, this behavior can be distracting and ultimately negatively affect worker productivity, the research concluded.

More than 1/5 of survey respondents reported that workers at their companies had recently been confronted or disciplined by an authority figure for spreading rumors or eavesdropping. But increasingly, executives are taking an even firmer stand against the spread of confidential information by installing equipment to make eavesdropping harder. That's meant a lot more business for Tom Keonig, president of Dynasound, a company that specializes in sound-masking devices.

"We have indeed seen increased demand," he says. Dynasound devices are designed to minimize the leaking of sensitive conversations through walls, doorways or vents. Keonig notes that eavesdropping is not always intentional or malicious, but even inadvertent overhearing can create problems. "We are just trying to stop the cross-talk," he says.