Laying off employees is hard to do


Now that the economy is heading south, companies are tightening their belts faster than you can say Alan Greenspan. It’s been a booming ten years. The downturn of the early 1990’s seems like a familiar but foggy memory after a wild tequila party. The dot bombs are nursing their hangovers and the rest of the economy is feeling their pain.

The downturn of ten years ago saw cutbacks and layoffs just like this economic slide. But this time there is a twist. Although companies may have excess employees at the moment, the tight labor market is a new reality, which is making them think twice about how they are approaching the layoffs. Out of necessity, mean and lean has become kinder and friendlier. These companies know they may need to hire again soon and they also can’t afford to alienate their remaining employees, whose productivity will be more important than ever.

Lately, I have been received numerous telephone calls, letters and e-mails from companies facing layoffs that want help with developing strategies that will help them to rebound once the economy bounces back. Here are some initial ideas:

§      Senior management needs to strategize early. Companies that take a proactive, honest approach and educate employees about what is happening in the industry will take some of the shock out of the layoff news to employees. Companies that treat employees like adults—by sharing financial information and industry information as a part of doing business, will be in a more favorable position if the news turns ugly. Every employee hates surprises.

§      Break the news early and give employees a chance to get their financial house in order and their job searches underway. Even if your company doesn’t have to comply with the federal Worker Adjustment and Retraining Notification Act, known as WARN (It essentially requires companies with over 100 employees to give employees 60 days notice.) take the high road and tell them as early as you can.

§      Help managers with training on how to lay off an employee with sensitivity and dignity. Don’t just help them with the words to say, include some training on empathy skills and how to handle varying reactions. For example, there will be less residual bitterness if employees are given time to collect their things and say good bye to their co-workers. Cases where managers abruptly escorted laid off workers to the door, or laid them off via e-mail, are proof that mistakes made now will result in endless hours of damage control for months after the layoffs are over.

§      Strive to make the cuts all at once. Don’t be fooled into thinking that making three cuts over a period of a year will be easier on employees than a big layoff all at once. Survivors, who thought they had been the spared the axe, only to be surprised a few months later, will turn ugly and the rest of the employees will start bailing like rats from a sinking ship. Serial layoffs create cynical employees who will never trust their employer again.

§      Realize that the entire company is feeling this loss, not just the laid off employees. It’s like cutting off an arm. The rest of the body knows it’s missing, needs to learn to adapt without it and feels the pain of the loss. If the company ignores the emotions and concerns of the surviving employees it is going to send them into shock and the healing process will take twice as long. Make sure managers and executives spend enough face time in informational meetings and counseling these employees.

§      Find ways to help laid off employees make a fresh start. Connect them with community agencies, staffing companies and outplacement firms. Provide for a severance package, if appropriate. These people will be your ambassadors for good or evil. Their friends and relatives will watch how they are treated and it will affect whether or not people will want to work for your company in the future.

§      Be respectful of those who have left. Imagine how remaining employees felt when their boss said, "We’ll be just fine without those people…they didn’t contribute as much as you did anyway." You won’t be surprised that this bungled attempt at a compliment backfired. The surviving employees valued their former co-workers’ contributions and many of them were friends. They suspected that their tactless manager would be quick to discount their contributions in the future, too.

If a lay off is an economic necessity for your company, remember that it is only temporary. A little caring and sensitivity now will pay off down the road when you are hiring again. Who knows, some of your former employees may even want to re-up.

Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616,, or 
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