Communicating Layoffs to Employees

Communicating layoffs to employees is never going to be easy. After all, they affect the entire company. The process disrupts the livelihoods of those being let go and creates uncertainty for the retained employees. For many, the real or suspected implications of this type of workforce reduction provoke palpable fear and anxiety.

While layoffs and furloughs are often the results of sudden events, some have a longer lead time. Either way, owners and managers should be able to discuss the situation openly and honestly without causing panic among staff. Ultimately, communicating layoffs effectively to all involved is an essential step in how to manage layoffs successfully. Being prepared to do so can help ease the difficult transition for everyone.

Start with a plan

Whether a layoff looms or you’re prepping for what may come down the road, crafting a plan is critical. Communicating layoffs correctly can help employers and human resources teams to avoid workplace panic and maintain productivity. Before addressing employees, prepare by:

• Deciding what needs to be communicated.
• Noting what you shouldn’t say.
• Gathering the required documentation.
• Determining how you’ll respond to questions.

Some situations call for targeted groups or individuals to be relieved of their duties. Others call for a company-wide slowdown. Mass layoffs and furloughs are never “good news,” nor would it be fair to try to spin them as such. The goal with communication plans is simply to inform both departing employees and remaining employees of what’s happening and what may occur in the future.

Act quickly

Staff may already be aware of economic or governmental factors affecting the company, but often the rumor mill gets it wrong. Gossip can chip away at employee trust and workplace loyalty. And related panic can impact productivity, decrease morale, and encourage employees to look for jobs elsewhere.

If there’s a buzz around the company, be ready to call an all-hands meeting quickly. Once everyone’s present, discuss the issue and put layoff rumors and other misinformation to rest. And don’t over promise or mislead. Simply let people know you’re formulating a plan and when it’s ready, you’ll let them know immediately.

Be specific in your corporate communications

When developing your plan for detailing layoffs to employees, outline the specific reason for the reduction. You may not be able to provide particulars about layoff decisions, but staff deserve to know the underlying cause. At least explain that you’ve reviewed the financials and that the course to maintaining long-term company viability involves short-term pain. If you’ve exhausted all avenues for avoiding layoffs, let them know you tried.

Treat impacted employees with compassion

Your layoff communications should balance professionalism and empathy. Being short, uninformative, or rude will make the already-uncomfortable process even worse. It could also damage your company culture as the behavior gets back to your retained employees.

Soften the blow by:

• Meeting with impacted employees individually.
• Having a member of the human resources department explain the severance packages.
• Promptly and honestly answering their questions.
• Giving employees support in their new job searches. Consider providing a pre-written letter of recommendation and offering to be a reference for prospective employers.

Prepare senior leadership for their roles

During a layoff, leadership should be viewed as a united front. Internally, employee morale will depend on what leadership models. Externally, the company’s reputation may be on the line.

Before announcing the layoff, managers should be informed of the details, who will be let go, and how and when it will be announced. This helps them plan how to manage communications with their own teams, whether they are losing people or not. Even teams that aren’t directly impacted by layoffs will still have questions and need assurance and support. Some surviving employees might in fact experience career grief in the aftermath.

The company’s HR professionals and senior leadership should set the language and tone for the layoff communication. This helps everyone share and receive the same message and avoid confusion.

Communicate widely, then specifically

No one wants to be at the water cooler and hear the entire marketing department was laid off. Even if your plan affects only certain departments, communicate to the entire company that a layoff is pending. Briefly outline the need for it, and let staff know the news doesn’t impact every department. Tell the group you’ll be communicating separately with staff members and managers of affected departments that day. Immediately afterward, discuss the situation with the groups that will be impacted. That way, you’ll quash concerns that “maybe we’re next.”

What to say to affected teams

Granted, some means of sharing layoff news are better than others. Still, it can be awkward. Try the following approaches:

• Getting to the point quickly.
• Using a script or outline to help you stay on track.
• Telling teams at the same time.
• Being available for questions.
• Letting employees know the decision is final.
• Giving a timeline for laid off employees to clean out their workspaces.

What to avoid

Some things should be left unsaid during a layoff. Don’t:

• Sugarcoat the situation.
• Start with small talk.
• Be vague.
• Share the news with some employees but not others.

A good approach

Something to this effect is both direct and respectful: “I’m sorry to inform you that your position will be on layoff status beginning XXX date. The decision was made after lengthy consideration of our options and does not reflect your value to the organization. We’ve looked at all the alternatives, and unfortunately, the decision is final.”

Have documentation ready

Collect any necessary paperwork and internal documentation. Make sure it’s personalized and ready for each employee. If you’re notifying an entire team, have envelopes ready with each employee’s data included. Tell staffers they can pick up such items as their layoff notice, Consolidated Omnibus Budget Reconciliation Act (COBRA) notifications, and other paperwork. Each packet should have:

• Written notice of the layoff — which may be necessary to apply for unemployment compensation benefits.
• Information about company supplemental unemployment benefits if applicable.
• COBRA notification documents, for the continuation of insurance coverage(s), if applicable.
• Notification of any available sick, vacation, and/or personal time available that can be paid out due to the layoff.

Keep it legal

Be sure to consult your legal advisor(s) and employee contracts before finalizing and announcing your layoff plan. How you proceed may have legal implications, so don’t communicate anything that hasn’t been legally approved.

Be straightforward

In your attempt to offer support to employees, don’t put an unrealistic spin on the situation. If you know the shutdown will be temporary, share that information with details about when staff can expect to return to work. If the layoffs are open-ended, be truthful. Let people know you’ll do your best to return the company to previous staffing levels, but if they find other work, they should accept it. Employees will need to make appropriate arrangements for their financial health.

This is hard news for most staff members, and your role is to be professional, frank, and as helpful as possible. Be ready to respond to their questions quickly and appropriately, but don’t offer false hope.

Inform current employees and clarify changes

Layoffs not handled honestly and upfront can breed gossip, suspicion, and dissatisfaction among remaining employees. Company leaders must craft the right message and plan for communicating it well.

• Keep current staff updated on the changes. Tell them how many employees will be laid off, when it will happen, and how the company made the decision.
• Address changes in their individual workloads. Explain any shifts in management and workflow, including any added responsibility to each employee’s job.
• Encourage and answer any questions the remaining staff has about the layoff to discourage paranoia and gossip.
• Monitor productivity. Managers must watch the company workflow to ensure it’s progressing as needed. There’s a chance some employees will be overloaded with extra work. There also could be an issue with employee morale. Handle any sign of it quickly.

It may not feel like it at the time, but layoffs can result in positive outcomes for the company. Making and following a plan for successfully communicating layoff news is essential for minimizing negative blowback and protecting remaining employee morale and productivity.

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