There is seldom an opportune time for companies to implement layoffs, and if one were to consider timing, January—just after the holidays—would not be among the preferred choices. Nevertheless, historically, the initial month of the year often sees companies engaging in restructuring efforts, seeking cost-cutting measures, and ultimately resorting to employee layoffs.
While layoffs may seem unavoidable, with 96% of businesses downsizing in 2023 and an anticipated 92% expecting similar actions in 2024, some companies exacerbate the already challenging situation for their employees.
We have all encountered or possibly undergone unsettling stories about layoffs. For instance, a tech company recently dispatched early morning emails to 12,000 employees, informing them of their termination. Unfortunately, many employees failed to check their personal email accounts, only realizing the situation upon arriving at work later that day when they were unable to access the building.
There is an opportunity to approach layoffs more considerately by steering clear of common pitfalls and providing compassionate exits for affected employees.
Layoffs may not be the best solution.
When companies decide that layoffs are necessary, they must also recognize the enduring repercussions such actions can have. This includes a breakdown in trust between the company and its employees, adverse effects on the financial and health well-being of those laid off, increased anxiety among remaining employees, and a tarnished public image.
Additionally, research suggests that although layoffs are typically implemented to reduce costs, companies may not always experience the anticipated performance improvement. Furthermore, a new challenge may emerge: layoffs could induce turnover among the employees who remain.
In the past, negative company-employee separations were confined to word-of-mouth communication. However, in the present era, employees can swiftly and virally share their experiences on social media platforms, enabling customers, partners, the public, regulators, unions, and shareholders to develop unfavorable opinions about the layoffs, the organization, and its leadership.
Common mistakes when implementing layoffs.
In the era of widespread remote work, business leaders might assume that handling layoffs through email or in a large-scale Zoom call is more convenient. However, this is where companies make a crucial mistake. The remote model is being pushed to an extreme, overlooking the essential aspect of treating individuals with respect and dignity, regardless of the company’s operational mode. The most detrimental layoffs often stem from specific reasons. Here are some common examples:
- a lack of transparency about the reason for the layoff
- Failure of leaders to explore alternatives to layoffs
- unfair and inconsistent processes in the selection of employees for layoffs
- inadequate communication from managers
- neglecting the well-being of employees left behind
How to help your employees with their exit.
While layoffs may be inevitable, companies have the opportunity to mitigate the impact by incorporating empathy into the exit process. In addition to formulating a considerate plan that provides information, resources, and support to assist laid-off employees in transitioning, companies should also consider the manner in which they execute the plan. Are employees being treated with kindness and empathy?
While no one anticipates receiving accolades for managing layoffs, a smooth process leaves those affected feeling respected and acknowledges the company’s thoughtful consideration of their needs. In such instances, individuals are more likely to perceive that their work and time were genuinely appreciated.