Undoing Layoff Mistakes

One company’s layoff strategy was to have none at all—instead sending out email pink slips. Another firm, meanwhile, spent weeks planning the effort trying to create compassionate communications to employees and stakeholders. But both firms ended up with the same result: a beating in social media.

The HR department spent weeks planning layoffs, complete with strategic analyses of impacted departments, compassionate communications with employees and stakeholders, and the kindest of goodbyes. And yet when the smoke cleared, the mood of the remaining employees ranged from nervous to disgruntled, and the company had taken a beating on social media. 

With a recession looming, some 70% of leaders say that they are planning or enacting cuts, according to a recent poll. And the questions on many leaders’ and stakeholders’ minds are simple: Will they get it right? Can they? Recent headlines have described at least one large tech firm that got it all wrong—but experts say that even those who plan well find it can be tricky to avoid post-layoff damage. That can harm morale and profits, as well as any future recruiting efforts.  “It’s hard to recruit people into a place that has a damaged brand and low morale,” says Leila Lance, global technology market advisory leader at Korn Ferry.

For decades, organizations typically swung the axe by trimming a standard percentage from each department—often 10%. This, companies eventually realized, damaged growth and performance. Today’s cuts are much more strategic and targeted. But experts say even with the best intentions and efforts, layoffs consistently spur unintentional consequences, often simply by being at odds with internal purpose and teamwork messaging.

Much of the laying off this month has unfortunately fallen upon the tech industry, which is particularly green at firings. Many more in this sector are anticipated. “They don’t have the experience,” says Lance, who points out that many major tech companies either didn’t exist or weren’t yet public firms during the 2008 recession. Yet, in this unusual economy, many of these same firms plan to continue trying to hire to fill critically needed skills.

“When layoff stories hit the media, it absolutely changes how people think about your company, values, and products,” says Nathan Blain, global lead for optimizing people costs at Korn Ferry. His counterintuitive approach to post-layoff repair efforts is to design them around exiting employees: “Most leaders forget that people have very close work friends.” He believes any behavior perceived as respectful and helpful to exiting employees can go a long way toward improving the engagement and emotional commitment of remaining employees, as well as minimize brand damage. Creating soft landings through career transition services (CTS), which connect exiting employees with positions both internally and externally, can be an opportunity to build the company brand in the professional community.

Remaining employees will understandably be nervous and want to know if more cuts are coming, whether the company is stable, and whether they should be looking for jobs, says human resources expert Ron Porter, senior client partner at Korn Ferry. The best antidote, he says, is frequent communication both one-on-one and in groups, to explain the criteria and business issue that drove those layoffs. “Be comfortable talking about it,” he says. As for layoffs done poorly? Blain says some expression of regret can go a long way in repairing post-layoff damage. “Contrition is usually essential,” he says. 

Read more This Week in Leadership articles