These days, reading news without the announcement of layoffs is rare. From Intel cutting 24,000 jobs for restructuring to TCS laying off 12,000 employees to shift their operational model, layoffs have been on the rise in different industries as companies are experiencing slower growth.
Traditionally, companies used to lay off employees during recessions to save money; some are still moving with the idea that reducing employee numbers is the most effective and easiest way to deal with the financial challenges.
But the incremental approach to layoffs also causes risks. Everyone notes that the company might not be making enough, and it seems like the first tool is to let people go because there is no other way to control costs. According to experts, cutting employees in stages is the beginning of a company’s death spiral.
The Major Challenges for Employers
Companies need to be careful about who is let go, who is kept, and what should be done with the tasks people were doing earlier. The layoff makes it tougher to manage.
The news of layoffs might spread as team members see the upset faces of their colleagues after an unexpected meeting with their managers. Today, the employees may not be present, but a single message can immediately alert tens of thousands of employees worldwide. Whether companies want to announce it or not, the news spreads from employees to social media and journalists.
The employees who are still part of the company lose trust in management, and they leave, and the remaining employees just create a doom spiral at the company. Further, treating employees poorly is considered short-sighted. Earlier, a small group of employees used to protest against the company’s decision to cut jobs; today, thanks to social media, anyone can challenge the decisions.
Layoffs are hard on the company’s performance with high reliance on R&D, low capital intensity, and notable growth. Layoffs focused on cost-cutting generally lead to drops in share price.
The Right Way to Handle Layoffs
- Explore Alternatives: Whether you are going for a layoff due to declining sales or new strategies, go for other options like reducing hiring, delaying bonuses, and taking other steps. You can think of furloughing one or two mothers.
- Eliminate Smartly: Firing the highest-paid individuals may seem an easy task, but this could create a skills gap in the organization. Apart from the salary, consider the loss of knowledge and influence.
- Announce Mindfully: While delivering the bad news about the layoffs, give each person a one-to-one meeting. When you communicate effectively, it minimizes the stress, and employees do not have to wait and wonder whether they are going to be let go. Inform the whole company ahead of time with complete details.
- Support Laid-off Employees: Losing a job is tough. During this tough transition, show each other empathy and respect. It may include listening to people who want to talk, showing concerns and supporting them, and motivating them to look for a new job.
- Ongoing Support for Employees: The existing employee required special attention. They may feel shaken by the downsizing, overwhelmed by a heavier workload, and stressed about the future layoffs. Maintain regular communication and try to understand your employees’ concerns. People trust action more than words. So, you need to ensure each of your statements syncs with your actions.
- Apologize Publicly: Earlier, corporate leaders were not required to make public apologies for doing mass firings or layoffs. Today, how you apologize matters. Do good research, acknowledge the harm, explain your actions, and make an offer of repair that will actually help the harmed person.
So, these were some key steps companies need to take after layoffs. Workforce management is evolving with time. You can successfully weather the storm of layoffs by maintaining the trust of three major groups, who affect your company’s future. This group includes employees you let go, employees you retain, and employees who might work in the future. With these groups, you can be better than other companies; just keep trust at the center of your entire decision-making process and be transparent.
