There’s no way around the toll that job loss takes on employees - the financial stress of losing a job and having to find another one, uncertainty of the future, the sadness of leaving a role that one might have enjoyed and felt genuinely fulfilled by. But there are ways that companies can handle it smoothly to minimize the negative effects as much as possible - and ways that it can be fumbled.
Layoffs are unfortunately a painful reality of the working world, hitting many places of employment in recent years, at times more frequently than others depending on the state of the economy. Big tech in particular has been hit hard the past few months. Since the start of the year, tech companies have laid off almost 95,000 workers.
It’s worth it to put in the time and effort to do layoffs the right way. The costs that are saved by cutting jobs may not be worth it if a company gets bad PR for the way the situation was handled, if remaining team members have reduced productivity or morale, or if the wrong people are let go.
Here are some examples of mistakes to avoid when eliminating positions and letting people go. These layoff failures were unfortunate for those involved, but they can provide valuable lessons. Consider these the 7 deadly sins of layoffs.
1. ‘Crying CEO’
What happened: When marketing agency HyperSocial laid off two employees in 2022, the CEO caused quite a stir with his LinkedIn post announcing the move, saying “I can’t think of a lower moment than this” and attaching a selfie of himself crying. The post received swift backlash, with some saying he was making the moment about him and that the focus should have been on helping the employees who lost their jobs.
What could have been done differently: While it’s a good thing to be transparent (some praised the HyperSocial CEO for being vulnerable and open), putting too much focus on leadership rather than the people whose lives have actually been affected can be seen as insensitive or self-serving. Think twice before making leadership too front-facing with a layoff announcement to the public.
2. Not being direct
What happened: In 2014, Microsoft announced layoffs that affected more than 18,000 employees, burying the announcement in the 11th paragraph of a rambling message about the company’s corporate strategy and plans. This move was the company’s largest instance of job cuts ever. (They had previously eliminated 5,800 people in 2009.)
What could have been done differently: It’s important to be communicative and transparent with workers about why this is happening and what led to the decision, and it might be tempting to soften the blow by easing employees into it. However, burying the lede with too much information can be frustrating for an employee who will just want to know if they still have a job or not. Imagine a situation where someone needs to deliver bad news to you. Wouldn’t you rather they just come out with it rather than taking you on a winding route of buzzwords and empty pleasantries? Put yourself in the shoes of an employee to help determine the best way to deliver the news.
3. Relying too much on technology
What happened: A brief conference call might be a good way to make sure employees and managers are on the same page in regards to a project, or to have a short team meeting. But in 2014, news outlet Patch used this method to announce the layoffs of hundreds of employees, ending with the COO saying “Thank you again and best of luck.” They certainly got to the point quicker than Microsoft and their meandering email, but when it comes to something as impactful and possibly life-changing as losing a job, short and sweet… isn’t so sweet.
What could have been done differently: With the rise in remote work in recent years, it’s just reality that a lot of workplace business must be conducted virtually, and that includes delivering bad news. But there are ways to handle it delicately so employees don’t feel like they’re being broken up with via a quick phone call. Abruptly dropping a bomb on employees and then leaving them to pick up the pieces appears callous. Is this what you want the organization to be known for? Treat employees with dignity and be communicative so they feel informed, respected, and comfortable asking questions.
Conducting layoffs certainly isn’t comfortable. No one wants to be the bearer of bad news. But keeping it brief for the sake of one’s own comfort and forgetting to be human doesn’t give laid-off workers the dignity they deserve.
4. Leaving employees high and dry
What happened: In November 2022, Twitter let go of thousands of employees across many different departments after being acquired by Tesla CEO Elon Musk. Several workers reported that they were locked out of their company accounts ahead of the notification that they no longer had jobs. A class-action lawsuit was filed, with some employees alleging that Twitter violated the WARN Act (Worker Adjustment and Retraining Notification). Two months after this wave of layoffs hit the social media giant, several former workers said they still hadn’t received a formal severance offer, even when their official separation date came and went.
What could have been done differently: Imagine showing up to work one day and not being able to log into your email account with no explanation. You wait for months to get any information about your severance package. Leaving employees frustrated and waiting for answers adds insult to injury and turns up the heat on an already stressful experience. Inform them of the situation directly and with kindness before locking them out of their accounts, and work to develop a valuable severance package that departing employees deserve to help with the transition.
5. Poor timing
What happened: In 2014, mortgage company Better.com laid off more than 900 employees a few weeks before Christmas. (The layoffs were also announced in a Zoom call that allegedly clocked in at under three minutes. They could have used a lesson from Patch’s conference call.)
What could have been done differently: There are many factors that go into a company’s decision to eliminate positions and cut costs, and the need could strike at any time of year. But if possible, it’s important to be considerate of the timing. Being laid off can bring immense financial stress as is, and dropping the news at an expensive time of year, such as right before Christmas, can be devastating. Before making a big announcement that is likely to bring stress and negative impacts, take a step back and think about the optics, as well as the company’s values and brand. Is this really the best time to drop life-changing news on the team?
6. Constant layoffs
What happened: In 2017, personal finance company NerdWallet had three rounds of layoffs, in April, July and November, after struggling with profitability and not meeting their revenue projections. One GlassDoor review of the company that year said the repeated layoffs “has crashed company morale.”
What could have been done differently: This “death by a thousand cuts” approach to letting employees go, that results in constant rounds of layoffs, can cause company morale to plummet because employees are living in fear that they’ll be next. No one works well on shaky ground. It can be difficult for organizations to predict exactly what’s coming next or what type of state they’ll be in down the road, but planning ahead as much as possible in order to conduct the layoffs in a single action is more efficient and respectful of employees and better for the long-term culture at the company. It’s worth it to consolidate the turbulence and time of change as much as possible.
What happened: The U.S. Equal Employment Opportunity Commission got involved after technology company Intel laid off employees in 2015. An investigation was conducted after employees raised the alarm, and it was found that there was “reasonable cause” to believe that eight workers over the age of 40 were laid off due to their age. According to court filings, it appears that the company recently settled a discrimination lawsuit brought by one of the laid-off employees.
What could have been done differently: It is legally and morally imperative to make sure that bias is not driving the layoff decisions. Even if there is no clear demographic difference between those who are being laid off and those who are keeping their jobs, be aware of factors that could appear like discrimination, for example, hiring replacements for the roles that were “eliminated.” When this occurs, it could be argued that the layoff was wrongful termination and actually a result of discrimination and an excuse to get someone else into the position, even if that’s not actually true.
Layoffs are challenging, stressful and grueling for any organization, and there’s no one correct way to navigate them. The ways that layoffs are conducted at high-profile companies can go viral and have a lasting impact on public perception of the organization. (One TikTok user who was part of the 12,000 employees recently let go by Google went viral for documenting the experience of learning the news in the “Day in My Life” video format popular on social media.)
Here are some final tips to keep in mind.
Helpful tips for conducting layoffs
- Do your research. Why is this being done? What will the structure of the organization look like post-layoffs?
- Focus on the positions that need to be eliminated, not the people.
- Consider internal transfers before layoffs. Maybe someone’s skills can be used elsewhere in the organization.
- Put yourself in the shoes of employees who are receiving the bad news, and have compassion for the situation.
- Be considerate with the manner in which layoffs are announced or employees are notified.
- Prevent problems before they happen. Avoid discrimination, or anything that can even appear similar to discrimination.
- Help the employees who lost their jobs as much as possible, whether that’s with a comprehensive severance package or connecting them with recruiters to aid in their search for a new job.
- Be prepared for some employees to experience corporate survivors’ guilt, and know how to help.
- Take steps to improve workplace morale.
Above all else, employees who are losing their jobs, as well as remaining employees, deserve to be treated with kindness and dignity. Employment loss is a stressful situation that must be handled delicately. We can learn from the missteps taken by other organizations and ensure that when tough steps have to be taken, they’re done smoothly, effectively and with respect.