Personal finance

Leading through layoffs: How to manage workers on their way out — and those who stay

High-profile layoffs at Meta and Twitter and planned cuts at Disney have heightened concerns on the part of managers and senior executives at employers nationwide who are struggling with how to lead a team through a round of corporate downsizing. 

How a company handles a layoff can have a major impact on its future success. Poorly managed, a reduction in the workforce can damage a company’s reputation.

“You don’t want those you just laid off to go now splatter all over Glassdoor or somewhere else how horrible you are,” said Eric McNulty, associate director of the National Preparedness Leadership Initiative at Harvard University. 

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Former employees could go on to be future customers, partners or colleagues.

“You may actually want these people back or refer people back to you later when you’re once again hiring,” McNulty said. “So you want to have that alumni network in good shape.”

Be straightforward and transparent

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When announcing layoffs, experts say, business leaders being both straightforward and transparent about the reason for the job cuts and their impact is an essential first step.

“Be clear, be careful and be compassionate,” said McNulty, co-author of “You’re It: Crisis, Change and How to Lead When It Matters Most.”

“Make sure people understand why you’re doing this,” he added. “Make the business case to them and not the usual corporate speak of ‘market conditions.'” 

Leaders should also explain “other options they considered, how they hope to not have to make the decision again and how they are treating impacted employees,” said Paul Wolfe, a human resources advisor and board member at PayScale.

Communicate with empathy

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Messages regarding layoffs should come from individual leaders who are “front and center,” not “HR” or “leadership,” said Jennifer Benz, a senior vice president at the benefits communications firm Segal Benz.

Leaders need to “show empathy” and be careful not to focus on their own feelings “rather than being sympathetic to the situation they have created for their workforce,” she said. 

Wolfe said one-on-one conversations are better than group meetings in discussing layoffs with your team, and planning the logistics of communications is also important.

“Ensure system access and removal from directories does not happen before the employees are communicated to,” Wolfe said. “I respect companies protecting their resources but how they treat impacted employees is very telling to employees that are still working there.” 

“These employees were not criminals and should not be treated as such,” he said.

Spell out the details

Don’t make employees who have been cut do the legwork when it comes to understanding severance pay, job placement or reskilling and upskilling support, health coverage and other benefit information, experts said. Spell it all out — and be ready to answer questions. 

Laid-off workers may ask for more information or request other perks, and leaders should have the answers. Columbia Law School professor Alexandra Carter recommended companies be ready if employees ask to provide a letter or formal email from the HR department stating a departing employee was laid off — and not fired for cause or performance. 

Be mindful of remaining workers’ concerns

Companies should “recognize this is a very difficult time for people who remain with the organization” as well, Benz said. “Make sure managers and leaders are available for remaining employees and can be clear about the future without overpromising.”

“Reinforce support resources, including mental health benefits,” she added.

Inform remaining workers about the changes that may need to be made in light of job cuts.

“Talk about what we are going to stop doing now that we have cut a big part of this organization until we figure out how we can work as effectively as possible,” McNulty said.

Benz said business leaders should be clear about the future, and make sure any promises are realistic and will be followed by action.  

What should leaders not say? “We should never be saying we can do more with less,” McNulty said. “If you could do more with less, you should have been doing it before.” 

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