THE ART OF MANAGING LAYOFFS: WHAT TO DO WHEN CUTS ARE UNAVOIDABLE

 

Prior to layoffs, you must maintain the lines of open communication regarding the state of the company. The idea of keeping bad news from employees never works. They often hear through the grapevine or even the news media that the company is struggling. If you do not share this information with them, you are setting yourself up for more challenges than you bargained for as the workforce becomes discouraged and distrustful of leadership. Always remember, if you do not tell employees what is going on, they will make it up.

 

If, despite all of your best efforts, you cannot avoid layoffs, the following guidelines will help you to make the best of a very difficult time:

 

1. Communicate openly and honestly. Fill in the information gaps for your employees. Share market data and the state of the company’s profits, and keep them informed of possible future actions. Don’t create an environment of mistrust by lying or glossing over the real situation. It is almost impossible to regain trust once people know that you have lied to them.

2. The manager must deliver the bad news directly to the individual(s) being laid off. As difficult as it is, never delegate the delivery of the layoff news. People tend to trust their manager first and the company second. Deliver the news personally and in private. Companies must allow time for the manager to have a one-on-one conversation with the person being let go. Be respectful and be prepared to listen. Give the person time to react. Everyone is different, and the manager should expect that they will encounter different reactions from different individuals. Some will be angry and vent, some will cry, some need time to reflect, and others may need facts and explanations, i.e., "How did you choose me over the other person?"

3. Provide outplacement support. The manager should ask, "How can I help?" The employee may need help creating or updating his or her resume. Make sincere efforts to help them start moving toward a new future. These efforts will also show remaining employees that you are treating them as people, not as line items on a budget.

4. Support the survivors. Employees who survive the layoffs will begin to have doubts about their futures with the organization. They need up-front communication about how their jobs and goals may change. They will want to know what the future of the organization looks like from management’s perspective. Address each concern with rational discussions.

5. The CEO should be visible and available to managers as well as employees. Prior to layoffs, he or she should provide coaching to the managers to assist them in delivering emotional news. The CEO has a powerful impact when he or she is willing to personally deliver a statement to the managers and employees regarding the necessity for these drastic actions and what he or she believes will be the impact on the company’s future. At the very least, the CEO should present managers with a written, prepared statement that they can share with all employees.

 

Saying that layoffs are not easy is an understatement. However, if done right, the organization can minimize the damages, ensuring that laid-off employees do not become ambassadors of ill will in the marketplace and that those employees who survive the layoff stay focused on the goal and the future of the company.