How to Communicate Layoffs to Your Staff

Layoffs cause fear, anger, and deep loss of trust among remaining employees. These feelings have very real repercussions: Research has shown that layoffs targeting just 1% of a company’s workforce result in a 31% increase in turnover. Another survey found that 74% of employees said that their productivity declined after their company’s layoffs. With more corporate leaders discussing the potential for AI-related mass job cuts, the anxiety around a reduction in force runs even deeper. How you communicate about layoffs to your staff can make a critical difference. Missteps can heighten fears and anger, driving people away, but a well-managed layoff announcement can start to rebuild employee trust and commitment. “Think of every conversation as an opportunity to re-recruit those who stay,” says Amii Barnard-Bahn, a leadership coach and former compliance executive at McKesson and Allianz. Here’s what to say—and what to avoid—in your communications around layoffs in order to best support and motivate your employees. Recommendations Be transparent about the state of the business. Layoffs will come as less of a shock if you’ve been sharing business updates with your staff all along. And when you’re making the announcement, it’s especially important to be honest about the performance challenges, macro trends, or strategic pivots that contributed to the decision. Sharing that rationale provides a sense of fairness, which builds trust. For example, if you’re making cuts due to AI, make clear in what way. Are specific roles being automated? Are shifting market conditions forcing changes to your business model, requiring new areas of focus? This specificity will show that you’re being strategic about what’s coming. Offering context for the change also gives you the opportunity to communicate your vision for a turnaround and future growth. Describe how freed-up funds are being reinvested—in new technologies, hiring employees for needed skillsets, upskilling for remaining employees, and so on—and what the future strategy looks like. This lays out a path for achieving the shared goal of keeping the company (and remaining jobs) viable. In your initial announcement, 75% of the message should focus on what is happening, why, and the emotional repercussions, and 25% on the way forward. In subsequent conversations, you should quickly flip this ratio and be even more focused on the future. Project steadiness. A layoff can make employees feel like everything they know is being uprooted, especially in a time of so much uncertainty. To counter this, tie the changes that are being made back to your company’s values or core strategic vision—demonstrate what isn’t changing. Microsoft’s Satya Nadella did this well in his recent reflection on the company’s layoffs, citing familiar aspects of the company’s mission, priorities, and culture while explaining his vision for transformation. Even more important is your emotional tone. Be clear, firm, and calm. Express that you care. As you speak to the future, you can even show enthusiasm and hope, but don’t lose sight of the difficulty of the situation. While you shouldn’t be afraid to express remorse or apologize for poor decisions that may have led to the layoffs—this builds trust as well—move on quickly. Good leaders who are empathetic about the pain that layoffs cause can become mired in their own feelings of guilt or failure. But displaying these emotions during the announcement will only add to employees’ sense of instability and beget contempt rather than sympathy. You can’t help your staff with their anger, sorrow, or confusion if you’re focused on your own. If you’re worried that you’ll tear up during the announcement, know that consistency is important. If your employees have seen emotion from you before, they’ll be more likely to view your feelings as authentic and honest. Just don’t let your emotions bring the proceedings to a halt or you’ll be in unstable territory again. To ensure that you can hit the right tone, practice in advance, ideally with a coach. Record your rehearsal and watch to see what emotions you’re projecting so you can smooth out any awkwardness. Avoid jargon. When making such a difficult announcement, it’s tempting to rely on buzzwords like “resource realignment,” “restructuring,” or “optimization” as a neat explanation that avoids difficult truths. Don’t do it. Employees will sense that you’re weaseling your way out of saying something hard and will resent it, further damaging trust. What’s more, people need to understand what’s happening, even if they don’t like it, and jargon keeps you from being clear. Speaking in plain language will show that you trust them enough to treat them as adults—and it will make you seem more human. Describe the support being offered to those who are departing. While severance packages may seem irrelevant to your remaining workforce, being clear about how you’re supporting those who are departing says a lot about how the organization values those who remain. Describe the financial package, job search or career transition counseling, upskilling, or other support you’ve put in place. Publicly acknowledging departing employees’ contributions can also be appropriate, but don’t make it over the top or it can be perceived as insincere. Establish ways for people to ask questions. When you’re announcing layoffs during a meeting, it’s tempting to shut down any interaction—what if people’s expression of their anger or concerns snowball and you lose control of the conversation or the chat? But forcibly muting employees just breeds further anger and cynicism, especially if your culture typically embraces open conversation. Instead, consider options such as: Encouraging people to submit questions privately during the session, which can be moderated or addressed by other executives in real time or in follow-up sessions Breaking into smaller groups for Q&A, each with its own member of the executive team Establishing a channel for employees to ask questions after the initial communication. The most commonly asked question is whether there will be more layoffs in the future. Even if you have none planned, this is never a guarantee that you can give. Say that you are confident about the new direction, but that no one can say “never” in this situation. Employees will appreciate your honesty. Provide extra support to your people managers. Most questions will come after people have had time to process, and those will largely go to middle managers. This should be encouraged, but be aware that managers often bear the brunt of communication and emotional churn around layoffs. Typically they deliver the news to departing employees (without having much say in deciding who will be affected), determine new ways of working, and, critically, manage the emotional response of remaining employees. Their morale can take a hit if they are not well supported. Equip them with FAQs on what to say, what not to say, and notes on how to maintain the right emotional tenor. Check in on them as the process goes on. . . . More and more CEOs are talking about the potential for layoffs in this new AI era. If executives aren’t open about their plans, it will “psychologically bankrupt us,” says Daisy Auger-Domínguez, former chief people officer at Vice Media. Organizations must become more transparent about their workforce planning. This is no longer just about creating org charts: It’s about continually figuring out what AI will be able to do, creating dynamic career paths, upskilling existing employees, and being honest with employees about what’s ahead. Go Deeper Layoffs That Don’t Break Your Company Sandra J. Sucher and Shalene Gupta HBR, May–June 2018 (35-minute read) What Companies Still Get Wrong About Layoffs By Sandra J. Sucher and Marilyn Morgan Westner HBR.org, December 8, 2022 (23-minute read) Layoffs Are Painful but You Can Communicate Them Compassionately By Laurie Tennant HBR.org, November 8, 2022 (12-minute read) 6 Mistakes Leaders Make When Announcing Layoffs By Amii Barnard-Bahn HBR.org, April 9, 2024 (9-minute read) Credits Expert advice courtesy of Paul Argenti (professor of corporate communication, Tuck School of Business at Dartmouth), Daisy Auger-Domínguez (adviser and former chief people officer, VICE Media; SVP, talent acquisition, Viacom), Amii Barnard-Bahn (adviser and former chief compliance and ethics officer, US Pharmaceutical, McKesson; former senior counsel and director, Ethics and Employment, Allianz); Sandra Sucher (professor of management practice, Harvard Business School); Laurie Tennant (principal, people advisory, Norwest Venture Partners).

How to Communicate Layoffs to Your Staff

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