As seen in Forbes
In 2023, the tech industry reckoned with more than 240,000 job cuts, a staggering 50% increase from the previous year that signals a broader trend demanding attention—especially given that not all companies report layoffs to the public. So why do layoffs, an inevitable part of corporate life, still catch us off guard?
No one wants to write or talk about layoffs, yet it’s the one thing for which every company needs a plan. In my career, I’ve seen the often soulless corporate approach to communicating layoffs slowly change to include thoughtfulness and empathy. I prefer the latter, and for good reason. I experienced the harsh reality of layoffs firsthand in my early 20s. Our newly launched team was called into a room and abruptly let go with little tact. It was unforgettable. Colleagues, many of whom had just relocated to Boston, were devastated. That experience left an indelible mark that has guided my approach to assisting companies navigate layoffs with grace and empathy.
Great companies plan for worst-case and best-case scenarios with their CFOs yearly, with layoffs as one possibility. Many, however, don’t pull the communications team in until layoffs are imminent. That’s not wise. Executives should have practical conversations about the implications of potential layoffs with their communications team even when things are going well—much like developing a crisis management strategy. Map it out and put it safely away in a drawer so it’s ready to deploy.
When layoff news hits, several common mistakes can hurt those losing jobs, remaining employees, and the company’s overall perception. Consider these mindful steps to help avoid disaster:
Embrace empathy and transparency in messaging and strategy.
A lack of openness around layoffs can bring rumors and mistrust. Focus on how this news will land with those being let go, their colleagues, your customers, partners and other external stakeholders, including investors—or, for public entities, the market.
At J.P. Morgan, I quickly learned the value of transparency and internal alignment during layoffs. While in Hong Kong, I was caught off-guard when I received a call from Bloomberg, asking about layoffs while we were also finalizing a four-way merger. While this was true—we were conducting layoffs due to overlapping talent—I declined to comment and swiftly took internal action, pulling together the CEO and COO, and letting HR know that I, as the communications lead, had to be in the know on timing and strategy at all times. Together, we outlined a new way of handling communications that would avoid silos and would ensure we were collaborating and communicating internally and externally. This was a change from the way things had been happening, and it allowed us to move the strategy forward clearly with our employees and with the press and clients as well.
Getting a system in place like this is essential at any time but especially during mergers so people know they are getting the right information. It also helps to avoid gossip, speculation and rumors. We never got caught off guard again.
Pick the right timing, communication methods, communicators and tools.
Announcing layoffs at inappropriate times or failing to coordinate communications effectively can lead to confusion and unnecessary distress—both within the team issuing communications and those receiving them. The CEO is responsible for setting the tone that ensures all executives with direct reports follow the CMO’s protocol in coordination with human resources. An executive who steps outside that framework and, for instance, leaks it to their own team will undo the intricate planning that goes into a cohesive communications strategy.
Consider the timeline, including things like holidays, the impact on stock prices and other market-related factors, if relevant, and ensure internal communications take precedence. Communicating layoffs via email or general announcements can appear insensitive. Management needs a plan that ensures human contact and communication with staff regardless of location. That way, the company can determine employees’ concerns and management can address them promptly.
Uphold morale.
Ignoring remaining employees’ concerns and state of mind can decrease productivity and engagement, lead to distrust, and accelerate the rumor mill. Early in my career, I witnessed a company use fear as a layoff strategy, leaking news to analysts who would then inform the media. This approach often left senior executives learning their fates in the morning paper and created a toxic environment of distrust. I saw the aftermath of a culture warped by gossip, fear and speculation within this large company.
Even with a thoughtful communications approach to layoffs, most employees are overwhelmed about their fate: “Will there be more?” “Am I safe in my role?” Address concerns about job security head-on, and provide insights into the company’s health and future prospects through tools such as FAQs, town halls and one-on-ones.
Relay support for all affected.
Employees watch how you handle their colleagues’ exits. It’s important that companies communicate the support they provide to departing staff, including offering references, severance packages, career counseling or job placement assistance. Putting layoffs into context is essential because this isn’t a firing. If an employee served 25 years, will two weeks’ severance be well-received? Consider company values and how best to give employees a dignified exit.
Keep everything legal and ethical.
Overlooking details can spark legal challenges and harm the company’s reputation. Include your legal team in the strategic planning and messaging review to keep the company protected from potential litigation.
Plan for the aftermath.
Ensure that management recognizes layoff news isn’t a one-time communications plan. A strong cadence of communications should follow to the remaining staff—and the larger contingent of stakeholders—about ongoing developments and the company’s vision.
Consider how to handle questions and feedback from employees, media and stakeholders. Create an FAQ document to ensure all executives and managers answering questions are consistent and informative, and build a decision tree detailing how to escalate calls from press, customers and partners to spokespeople who have been trained on the messaging. The last thing you want is an employee in customer service or sales speaking out of turn.
Layoffs are about far more than the bottom line: They’re about people. Though stakeholders tend to focus on numbers, an approach that effectively and believably acknowledges the human costs will pay off in the end. Creating such a communications plan will position your company as one that values people as much as profits, even in tough times. And that’s a narrative that will last far beyond the news cycle.
