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Why Recent Layoffs and Unaddressed Employee Grief Are Hurting Your Company's Bottom Line Communication can go a long way in creating trust, stability and vision in an organization's very unstable time of grief. This will, in turn, improve the company's bottom line as well.

By Megan J. Shen Edited by Micah Zimmerman

Opinions expressed by Entrepreneur contributors are their own.

It's no mystery that continued major waves of layoffs in the tech industry are causing suffering for those who are being laid off. But a major elephant in the room is overlooked among remaining employees: grief. Ignoring the grief that the remaining workers are experiencing threatens to impact the remaining workers' well-being and companies' bottom lines negatively.

More than 234,000 tech workers have been laid off this year. Major companies like Amazon, Spotify and Meta have cut tens of thousands of workers' jobs this year, including Google's recent round of layoffs this September. Obvious to most business analysts is that these large-scale layoffs create instability and inefficiencies within teams. What is less obvious, however, is that many remaining employees are dealing with grief around the loss of coworkers, work rhythms and stability amidst continued layoffs.

Research demonstrates and experts have long warned that layoffs cause detrimental effects on both individual employee performance and corporate performance. Additionally, major layoffs can cause issues for companies in future employability because future candidates remember how companies handled economic uncertainty through massive layoffs.

What is notably missing from the conversation around the current tech layoffs, however, is that many major companies are now facing a grief problem amidst their remaining workers. Failing to address this issue may make workers suffer and cost companies a lot of money through the loss of worker productivity, efficiency, and satisfaction.

Related: What the Future Looks Like for Fresh Graduates in the Tech Industry

The remaining employees at these companies are currently experiencing two major types of grief. The first is the actual grief of losing colleagues, work friends, team structure and dynamics, and often work schedule and range of responsibilities. Unfortunately, most companies and managers fail to acknowledge the psychological stress and grief their remaining employees might be experiencing after losing valuable team members.

The second form of grief is anticipatory grief, which refers to grief around the potential of losing someone or something. Most remaining employees remain under constant stress of worrying about losing their jobs, another member of their team, and stability within their role.

Because most of these layoffs are happening remotely, there is often an added layer of loneliness and isolation experienced by remaining employees. Remaining employees often lose meaningful social connections by being suddenly unable to reach their coworkers, many of whom they only had means of connecting via workplace channels. All this is happening against the backdrop of a loneliness epidemic in the U.S., as declared by the U.S. Surgeon General.

Related: How to Combat the Growing Epidemic of Loneliness in the Workplace

Following layoffs, remaining workers suffer. Prior research indicates that after a layoff, 74% of remaining employees report a decline in their productivity, 69% report the quality of their company's product or service declines, 87% report being less likely to recommend their organization as a good organization to work for and 77% report making more errors and mistakes.

Moreover, the most commonly reported feelings after a layoff are anger, anxiety and guilt. These are all common symptoms of grief. The post-layoff period is a fragile time within a company, one in which employers should provide adequate support and communication with their remaining workforce.

Whether employees are experiencing grief, anticipatory grief or both, the best way for companies to support their workforce is to address the grief head-on through open, candid conversations. Grief research shows that avoiding conversations around loss only delays the healing process and worsens things.

The translation for companies is that their employees will remain bitter, stressed and potentially angry about the situation if they do not feel seen or heard or their feelings remain unacknowledged. This, in turn, can reduce worker productivity and prevent new teams from forming positive and supportive team environments. Team dynamics are one of the biggest and best predictors of workplace efficiency, so ignoring this problem will be costly in the end, both in terms of well-being and productivity.

Companies hold a lot of power to course correct during this unstable time. Prior research indicates that following layoffs, workers who feel their managers are visible, approachable and open are 70% less likely to report drops in productivity and 65% less likely to report a decline in their organization's quality of work or service.

Managers must communicate with team members through one-on-one conversations, allowing their direct reports to process their feelings. This open, candid and empathic communication can create space for a new and positive team dynamic to emerge.

The best places for companies and managers to start are with key communication tactics that work in supporting those who are grieving and promoting resilience and growth:

  1. Acknowledge how remaining employees might be feeling
  2. Normalize experiencing feelings of guilt, anger, sadness, uncertainty, denial or regret following a major layoff
  3. Be candid about reasons for downsizing and layoffs
  4. Focus on the future and how employees can move forward with the company's new vision
  5. Connect employees with their new teams in meaningful ways to create social cohesion

Throughout the entire trajectory of layoffs, from announcing that they are coming to laying off individuals, companies should be mindful to keep their communications candid, consistent and transparent. Resources should be devoted to training managers and team leads in empathic communication. Designated spaces and meetings should be created for discussing the topic of layoffs. Employees should be given ample opportunities to ask questions.

Avoidance is the enemy of good communication, whereas transparent, empathic, and person-centered communication can go a long way in creating trust, stability, and vision in an organization's very unstable time of grief. This will, in turn, improve the company's bottom line as well.

Megan J. Shen

Entrepreneur Leadership Network® Contributor

Associate Professor

Dr. Megan J. Shen is a social psychologist and research professor at Fred Hutchinson Cancer Center. Her writing, research and speaking focus on how we can find hope and resilience through the changes, challenges, pain and losses in life and within our organizations.

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