Layoffs Don't Have to Decimate Your Corporate Culture. Here's How to Downsize With Respect and Empathy Leading a startup sometimes involves the tough decision of reducing staff. As economic tides and the market shift, here is how to manage layoffs while protecting your core corporate culture.
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Whether you call it rightsizing, downsizing, reduction in force or optimizing, layoffs are brutal for everyone involved. Just like any other management action, implementing layoffs in 2022 should reflect the respect and values of the organization.
Today's workforce expects more respect, support and empathy during a round of layoffs than people have experienced in the past. That goes for not only the people who are being laid off but also those who kept their jobs. Leaders today must understand that simply adhering to the letter of the law during a layoff is not enough. They must consider how the layoff impacts the culture and perception of the company. Here are some best practices when conducting a reduction in force.
1. Create a robust communication plan
Be clear about the need and reasons for the layoffs and the current state of the business. Let people know you considered many alternatives and took other measures before getting to the point you had to let people go. You want to model to your organization that reducing staff was the last measure taken after dozens of other alternatives.
Think through the best day of the week and time of day to communicate. If the decision will impact many people and you have different geographical considerations and time zones, you want to aim for a time that you can do it all concurrently. This keeps distractions and rumors to a minimum and diminishes the time people will wonder about their termination. The ideal time to communicate a reduction is mid-day, which allows you to answer questions of those who are laid-off and to then speak to the whole company about the action that was just taken and answer their questions.
Beyond that, ensure that remaining employees know who they're working with and the changes in the organizational chart so people can focus and get their work done. The sooner you get people working efficiently again, the better off you'll be and the better off they will be.
2. Balance company assets and respect impacted employees
Although you need to ensure the safety of your property from misuse, you don't want to become fodder for workplace gossip and distraction because you highly prioritize assets over departing employees.
This extends to how you plan to collect company property from remote employees. Avoid leaving this to the terminated employee; instead, send them prepaid shipping boxes for their equipment. Many employees may not have a personal computer, so if possible, offer a plan to buy theirs from the company at a discounted price or allow them to keep it as part of severance.
The same is true for mobile phones. If they are company-owned and can easily be transferred to a departing employee, consider allowing the employee to keep them. Most of the time, the phones have very little value to you compared to the departing employee.
3. Provide support for impacted employees
How you treat impacted employees during a reduction in force will speak volumes to your workforce, so be aware of what is at stake. Do what you can to help affected employees move on quickly.
It would help if you viewed these moments as an opportunity to build trust in your organization. Learn from how Airbnb conducted its staff reduction in 2020. They covered their whole recruiting staff into an outplacement team, offered stock acceleration for employees, and created systems to map all their departing staff to open roles worldwide. They turned their company into an outplacement force never seen before. This resulted in departing staff being almost more loyal to Airbnb despite being let go.
4. Give extra attention to top talent
When there are layoffs, and business is contracting, your top talent may start looking around for better opportunities. That's why you need to give extra attention to your key players and open lines of communication so they can express their fears and concerns and you have the opportunity to address them.
The last thing you want is to experience a loss of your crucial talent while the business is contracting and productivity is down. Get in front of it and talk to high-risk cases, so you are at least aware they may leave and can start planning.
5. Acknowledge emotions and low morale
During layoffs, productivity goes down. People are afraid for their jobs and upset that friends and co-workers are gone. They also may feel that they now have more work on their plates. Be ready to talk about this — anticipate these feelings and questions. Emotions inevitably run high, and productivity runs low. Acknowledge and connect with people — plan for your business to need some time to heal. Then, work hard at stabilizing the situation so people can focus on being a productive team again.
6. Outline the company plan
As soon as it is realistic after layoffs, leadership should outline a forward-looking business plan and strategic objectives so all employees can see you are designed to lead a healthier business that can provide stability and opportunities for employees moving forward.
If you prioritize the respect of the impacted employees while also recognizing the impact layoffs have on those left behind, you will minimize the risk of long-term negativity. No one wants to burn bridges in their professional relationships, so don't give them a reason to.