Seven Considerations When Laying Off Employees

November 30, 2022

By Matthew Kerzner 

Conducting employee layoffs is a difficult situation for all involved. True, there might be some alternatives, such as furloughs or early exit packages. But when times get tough, downsizing could become a harsh and unavoidable reality to keep a business afloat. Even some of the nation’s largest companies are implementing layoffs ahead of a possible economic downturn.  

Earlier in my HR career, I needed to lay off more than 1,000 employees. So, I’ll tell you from experience, it’s one of the most stressful and personally taxing things HR professionals and business leaders can face. But because of this, it’s important layoffs be conducted in an empathetic and compliant manner.  

If you're a CEO, business owner or HR leader—and are faced with needing to lay off staff, consider these tips. 

Include the Right Parties 

Conducting layoffs of any size is a major event for a business, so ensure you have the right people, both internally and externally, on board before breaking any news to the organization. Internally, along with having HR in the room, include the entire C-suite and department heads so they are aware of the news. This way they can both prepare for laying off staff in an ethical way and plan how they’ll adjust to working with a smaller team. Additionally, legal should be involved to ensure proper protocols are followed and there is nothing overlooked that could put the company at risk. Finally, marketing is an important resource when it comes to local media relations and proper messaging.  

Externally, business leaders should always consider leveraging legal counsel and working directly with any local unions, political leaders and media to ensure the decision is properly conducted and realized. Additionally, there are supplemental resources available to business owners during layoffs such as employee assistance program vendors and transition groups. 

Communicate Cleary and Concisely 

When dealing with something as serious as layoffs, clear and concise communication is key. Consider working with all the aforementioned parties to ensure everyone who will be in a leadership position has the same talking points to align the who, when and why of the layoff’s impact. Having a clear FAQ document leaders can reference throughout the process is a good strategy to maintain clarity. Additionally, urge your leaders to offer office hours for confidential one-on-one conversations, whether in person or online.  

Address the Subject Clearly and in the Open 

Like avoiding a difficult conversation that needs to happen, no one gains from beating around the bush or avoiding the subject. Consider holding town halls for the entire company to openly discuss the organization's ongoing health and make everyone aware if layoffs were the only option. This allows employees who may be affected to understand the reasons behind the decision, better prepare going forward and obtain more peace of mind through transparency.  

Recognize Signs of Concerns  

Whether it’s a feeling of “survivor’s guilt,” a looming fear that they may be next, or concerns for their colleagues who lost their roles, it’s often the case that current employee morale will drop following a round of layoffs. It’s important that these concerns and questions are recognized and addressed early and clearly. 

Along with that feeling of guilt, reduced loyalty and decreased trust, it’s not uncommon for organizations to also see lower productivity and focus. To avoid this, be ready to answer questions such as: 

Should I feel guilty that I still have a place to work? 

How can I trust management? 

How do I know if I’m next? 

Put Empathy First  

Layoffs are not a one-size-fits-all situation. While having a concise message is crucial to the process, employees will be impacted differently and react in their own ways. Due to this, leaders should not simply relay the same talking points verbatim when explaining the reasons for layoffs or answering questions. When the process feels robotic or like it’s just going through the motions, it loses the necessary empathy that is required in a decision like layoffs. 

It’s important that whoever is conducting the layoffs does not treat the situation like a transaction, but as one that will have unique impacts on all those affected. Ensure you include language that offers support and sympathy on behalf of the company. 

Don’t Wait for the Perfect Time 

Like any tough decision or conversation, it's oftentimes best to rip the bandage off and face it head on rather than ignore it. No one is poised to benefit by delaying what may be an inventible decision. Not only does the fear of the unknown create an unneeded stressor for those who may or may not be impacted, but waiting also only weakens the time value of severance packages for employees who will likely need to start looking for other positions. 

Never Make Light of the Situation 

Humor is often a coping mechanism when someone is met with a stressful or frustrating situation. Never make light of the situation. Not only does it show a lack of empathy for those impacted, but if anything is taken the wrong way it can leave permanent scars on the way employees, vendors and clients see how your organization treats its people. 

Whether it's due to uncontrollable external pressures or major internal organizational changes, conducting layoffs of any size is an extremely stressful and taxing process. Layoffs impact people's lives outside of work and can cause irreversible damage to companies when not handled in an empathetic and legal manner. I wouldn’t wish it on anyone, but if you’re a business or HR leader faced with conducting layoffs, consider these lessons to make sure you’re both doing right by your people and protecting your organization.  

About Matthew Kerzner

Matthew Kerzner is a Managing Director in the Center for Individual and Organizational Performance and the Center for Family Business Excellence. Matt has more than 25 years of experience in organizational development with a specialization in assisting family businesses and closely held businesses.