Although layoffs have been hovering at historically low levels in the U.S., that doesn’t mean they are rare. For instance, in March 2024, over 1.5 million people were laid off or discharged from their jobs. Although economists don’t seem worried about the current layoff rate, employers continue to face complex challenges that can lead to workforce disruption and restructuring. So it pays to think ahead.
Letting go of team members is never easy. For affected employees, the financial hardship is obvious. But the emotional toll often runs deeper. Stress, anxiety, and damaged morale can linger long after severance checks are cashed. And what about those who remain? Layoffs also leave their mark on the rest of the team, breeding uncertainty, eroding trust, and potentially weakening your work culture. It can even tarnish your company’s reputation.
When employers handle layoffs poorly, the damage compounds. But it doesn’t have to be this way. The alternative route takes a bit of effort, but it is worth going the extra mile.
Preparation Makes It All Work
Regardless of the reason for the decision, layoffs are serious business. So before that day comes, you’ll want to prepare. To handle layoffs more effectively, take these steps:
1. Cover Your Legal Bases
Understanding legalities (like the WARN Act), is crucial. But this is only a starting point. You’ll also want to consult with legal advisors to be sure you navigate the process correctly. This helps minimize the missteps that could further harm affected employees, or put your company at risk.
2. Create a Communications Blueprint
The heart of preparation lies in carefully considering how you’ll deliver the message. While in-person notifications are ideal for demonstrating empathy, logistical hurdles might require you to rely on an alternative channel, such as a video meeting or a phone call.
Regardless of the format you choose, it’s imperative to decide who will conduct these conversations — an HR representative, a direct manager, or maybe a combination that balances both perspectives. Develop a clear, compassionate script to be sure you’re consistent and avoid misunderstandings. And after the conversation, be ready to follow up with detailed information in writing for a reference that reinforces key points.
3. Plan Appropriate Next-Steps
Alongside the notification process, you need to give careful thought to the support you’ll offer departing employees. A severance package that reflects industry standards demonstrates a basic level of fairness and eases the immediate financial burden.
Outplacement services go even further, offering tailored guidance in resume writing, interview skills, and job search strategy — all of which can make a huge difference in helping a departing employee find new employment more quickly.
Finally, recognize that layoffs take an emotional mental and emotional toll on those affected. Offer access to counseling or support programs. This gesture of compassion acknowledges the broader impact on each individual’s wellbeing.
The Conversation Matters
Letting go of an employee is one of a leader’s most difficult duties. Preparation is essential, but the true test comes when you deliver the message. Empathy, clarity, and a commitment to supporting the affected employee are paramount. For better results, focus on these steps:
1. Ensure a Proper Setting
Before the meeting, set aside sufficient time in a private, quiet space where you won’t be interrupted. If you’re conducting the conversation virtually, ensure that you and the employee will be in places where you will feel comfortable having this sensitive conversation.
Prepare a brief, clear statement that leaves no room for misinterpretation. Once the discussion begins, avoid sugar coating the situation or getting sidetracked. This can be tough in an emotionally charged exchange, but it’s important to stick to your script and deliver the news in a simple, concise fashion.
2. Expect Intense Reactions
When you handle layoffs, you’ll find that people initially experience a range of emotions, from shock and disbelief to anger or sadness. Anticipate these reactions.
Remain calm and respectful, even if the employee becomes upset. Actively listen to their concerns and acknowledge their feelings. Be ready to answer practical questions about severance, next steps, and any resources your company is offering. But also avoid making promises you can’t keep.
3. Stay Open and Flexible
Although your goal is to be clear and concise, a bit of flexibility will help you humanize the experience.
Even when people are aware that a layoff is coming, each individual will process termination news differently. Some might want the meeting to be brief and focused on basic facts. Others may want answers to questions that extend beyond your prepared script.
You don’t need to drill down into details that may expose your organization to risk. Instead, if you feel uncertain about answering a question, write it down and indicate when and how the employee can expect a response.
The key is to strike a balance between providing essential information and showing human compassion during a conversation everyone dreads. With proper planning, empathy, and resources, this difficult moment in an employee’s life can also be a springboard to new opportunities.
Managing Beyond Layoffs: The Long View
The impact of layoffs extends far beyond the day when you hand out notifications. You’ll also need to address the wellbeing of remaining employees. This isn’t insignificant. In fact, research has found that layoff survivors experience a 41% decline in job satisfaction and a 20% decline in job performance.
When you handle layoffs, how can you constructively address this critical issue with your team?
1. Insist on Transparency
Transparency is vital. Openly address the reasons behind the layoffs and reassure your team about the company’s future direction. Acknowledge that this process is likely to cause worry among team members, and might even erode morale.
One way to support employees is by offering organizational renewal or resilience sessions so employees have a healthy outlet for their concerns and emotions. Whatever you do, focus on assuring team members that you care about their needs and you want them to be heard.
2. Avoid Security Issues
Although it rarely happens, disgruntled employees can pose a threat to company property or confidential information upon their departure. Even unintentional security breaches can compromise critical business systems and data. So, it’s vital to stay alert to potential security concerns in the immediate aftermath of layoffs.
Prepare to take timely precautionary measures. For example, you may want to deactivate computer access, collect company equipment, and increase office security, if necessary. These actions are not a reflection of distrust. They’re simply a prudent measure to ensure business continuity when employees hand-off responsibilities.
3. Protect Your Brand
Finally, don’t underestimate how layoffs can affect your company’s reputation. The way employees are treated — especially during their departure — sends a clear message to other team members, job candidates, clients, customers, and the broader business community.
By handling layoffs with compassion and respect, and providing appropriate support for affected employees, your organization can minimize damage to its reputation and maintain a sense of fairness and integrity.
How You Handle Layoffs Makes a Difference
Layoffs are a difficult business reality. There’s no way to sugarcoat this process. The emotional impact of layoffs on those who leave — and the related effects felt throughout the organization — are undeniably significant. However, thoughtful planning, caring communication, and a focus on supporting affected employees can help you navigate this challenge in a way that reduces hardship and aims for a positive path forward.
How you handle layoffs speaks volumes about your company’s values. Treating departing employees with dignity and respect isn’t just the right thing to do. It also benefits your company in the long run. By making responsible, compassionate action a priority, alongside strategic plans and resources, your company can weather tough times, while reinforcing your culture and broader reputation.
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