Layoffs—no HR professional or manager (or employee for that matter) wants to face them, but staff cuts are an unfortunate reality in the business world. Whether they happen because of economic downturns, changes in organizational structures, or a shift in strategic direction, layoffs can be a challenging process for everyone involved. How they’re managed can significantly affect an organization and its employees, as well as company brand and perception. In this guide, we’ll explore best practices for communicating layoffs to employees with empathy, honesty, and professionalism.
Understanding the Reasons for Layoffs
Layoffs most often happen due to reasons beyond an individual employee’s control—economic downturns, mergers and acquisitions, transformations in organizational structures, and technological changes such as the introduction of artificial intelligence, to name a few. Regardless of the reasons for a workforce reduction, it’s crucial to communicate them clearly and empathetically to the affected employees. Make sure they understand that the layoff decisions were driven by business needs, not personal performance.
Preparation is Key
Preparation is a critical step in the layoff process. Before announcing layoffs, develop a comprehensive plan detailing the reasons for the decision, the selection criteria, and the support you’ll provide to outgoing employees. This process should also include the timing and method of communication, along with strategies for addressing questions and concerns from both affected and remaining employees.
You should also prepare for individual meetings with each affected employee. These discussions are an opportunity to acknowledge the difficulty of the situation, express gratitude for the employee’s contributions, and discuss next steps.
The Importance of Clear Communication
By communicating openly and honestly, you show respect for your employees and their rights to know about significant changes that directly affect them. Effective communication minimizes rumors and misinformation, which can lead to unnecessary stress and anxiety among your workforce.
Often, companies use euphemisms or indirect language to refer to layoffs in an attempt to soften the blow or avoid the negative connotations associated with the action. Here are some examples:
- Downsizing: This term is often used to imply that the company is simply reducing its size, not necessarily that people are losing their jobs.
- Rightsizing: Similar to downsizing, but with an additional implication that the company is adjusting its workforce to the proper size for its current needs.
- Reduction in Force (RIF): This is a more formal term that is often used in official communications about layoffs.
- Reorganization or Restructuring: These terms are used when job losses are part of larger changes to the company’s structure or strategy.
- Streamlining Operations: This phrase suggests that layoffs are part of an effort to make the company more efficient.
- Cutbacks: This term implies that the layoffs are a form of cost reduction.
- Eliminating Positions: This phrase can make it seem like the jobs themselves are being cut, rather than the people in those jobs.
- Workforce Adjustment: This is another formal term that can be used to refer to layoffs.
- Resource Action: A term used by some companies, including IBM, to refer to layoffs.
While these terms can seem less harsh than “layoff,” it’s important to remember that clear, honest communication is best when delivering difficult news about job losses. Using euphemisms can sometimes come across as insincere or evasive, which can damage trust and morale among remaining employees.
Whenever possible, communicate layoffs in person or via a video call. This approach shows respect and allows for immediate discussion; however, adapt to the circumstances, including remote work arrangements or health and safety concerns.
Offering Support to Outgoing Employees
Supporting outgoing employees through their transition is a critical aspect of a respectful and empathetic layoff process. This support not only helps employees who are directly affected but also sends a positive message to your remaining staff. Here are several ways you can offer support:
- Severance Packages: A severance package can include a lump-sum payment, continued salary payments for a period, or other financial benefits. The specifics of the package may vary depending on factors like the employee’s length of service, job level, and the terms of their employment contract.
- Unemployment Benefits: Generally, employees who have been laid off through no fault of their own are eligible for unemployment benefits. Provide information on how to apply. Inform the employee that there is typically a waiting period before they start receiving benefits. While you may not know the exact amount the employee will receive, explain that the amount will be a portion of the employee’s previous earnings and benefits are typically available for up to 26 weeks.
- Outplacement Services: These services can help laid-off employees find new jobs. Services include resume writing assistance, interview coaching, career counseling, job search workshops, and access to job boards or recruiting services.
- Continued Benefits: Depending on the terms of the layoff, you may be able to offer continued access to certain employee benefits, including health insurance (through COBRA), retirement plans, or employee assistance programs (EAPs).
- References and Recommendations: Providing a positive reference or recommendation can greatly assist outgoing employees in their job searches. You might also consider writing a recommendation on LinkedIn or another professional networking platform.
- Job Search Time: Some companies offer paid time off specifically for job searching or interviewing. This can be a significant support, especially for employees who may not have expected to suddenly find themselves in the job market.
Managing Emotions: A Delicate Balance
Layoffs are emotionally charged events. It’s essential to approach these conversations with care and understanding. Allow employees to express their feelings and respond with genuine concern. While maintaining professionalism is important, showing genuine care can help preserve relationships and dignity.
Legal Considerations
As you plan and implement layoffs, it’s crucial to understand the legal landscape that surrounds such decisions. Legal requirements vary, including obligations regarding notice periods, severance pay, and non-discrimination. Always consult with legal counsel to ensure compliance and minimize potential liabilities.
Layoffs at companies with 100 or more employees must align with the requirements of the Worker Adjustment and Retraining Notification Act (WARN Act), which mandates that employers provide 60-day notice to employees prior to mass layoffs or plant closures. However, laws around layoffs can vary from state to state. While many states follow the federal WARN Act requirements, several have enacted their own layoff notice laws:
| State | Requirements |
|---|---|
| California | Applies to employers with 75 or more full or part-time employees where 50 or more employees are to be laid off due to a plant closing, mass layoff, or relocation of the business. No requirement that the number of employees to be laid off is a defined percentage of the workforce. |
| Illinois | Applies to employers with 75 or more full-time employees where 25 or more full-time employees are to be laid off if they make up 1/3 or more of the full-time employees at the site, or 250 or more full-time employees are laid off. |
| Maryland | The Maryland Economic Stabilization Act is voluntary and only applies to employers in the industrial, commercial, and business industries with 50 or more employees. |
| New Jersey | Applies to employers who have been in business at least 3 years and have 100 or more employees. It applies in situations where a covered employer transfers or terminates its operations during any continuous period of 30 days which results in the termination of employment of 50 or more full-time employees, or conducts a mass layoff of 500 or more full-time employees that results in an employment loss during any 30 day period, or 50 or more full-time employees representing 1/3 or more of full-time employees. |
| New York | Applies to private employers with 50 or more workers who layoff at least 25 employees. |
| Tennessee | Applies to employers with 50 or more employees. |
In addition to the WARN Act and state-specific laws, employers must also comply with other legal obligations, such as anti-discrimination laws, during the layoff process. It’s essential to consult with legal counsel to ensure all actions taken during layoffs are legally compliant and fair to your employees.
Ongoing Communication: Company and Individual Meetings
After the initial announcement, hold regular company meetings to update employees on the implementation of layoffs and address any concerns. Managers should also hold individual meetings with remaining employees to discuss any changes in roles or responsibilities and reassure them about the company’s future.
While layoffs are undoubtedly challenging, approaching them with honesty and support can help your company navigate the process more smoothly. Understanding layoff best practices and how to handle layoffs professionally can mitigate the negative impacts on your workforce and your company’s reputation.
By fostering open communication, treating outgoing employees with respect, and supporting them in their transition, you can maintain trust and morale among your remaining employees. Additionally, by ensuring legal compliance and providing ongoing communication, you can help your organization navigate this difficult period with minimal disruption.
Remember, layoffs don’t have to damage your company culture. If you’re facing this challenge, don’t hesitate to seek guidance and support. Click here to discover effective strategies for handling layoffs with empathy and professionalism.