Communicating Layoffs: How to do right by your employees and avoid a reputational hit

By Deirdre Walsh

News of layoffs, especially in the tech sector, have been hard to miss the last several months. Some of these actions have come as companies have adjusted to changing customer demand, revised growth expectations, and the disappearance of inexpensive financing. Regardless of the reasons for a reduction in force, it can generate anxiety among remaining employees as well as intense and often negative attention from media, communities, elected officials, customers, and other stakeholders. In an environment where employees are increasingly active and internal communications are more likely to become public (as previously discussed here), companies undertaking a staff reduction announcement should plan related communications thoughtfully and respectfully. Below we have outlined some key considerations to keep in mind.

Planning for announcement

• If possible, limit the workforce reduction to a single event, as multiple announcements risk undermining the company’s credibility among the remaining employee base as well as other core audiences, and can generate expectation and fear that more reductions are to come.
• Be mindful of reporting requirements. Determine whether you must comply with the WARN Act or other applicable laws and be mindful of the publication of layoff data prior to announcement. In light of the large layoff announcements, especially in the tech sector, social media influencers have raised awareness about the publication of layoff data and where to access it – which may instigate chatter amongst your employee base prior to rolling out layoff communications.
• Review planned events or digital content – such as social gatherings, executive or company trips, or social channel posts that highlight positive company morale or financial success – to ensure these previously scheduled events and content don’t conflict with or contradict messaging around the layoffs, further damage morale, or provide fodder for a larger media story.

Messaging and communicating the announcement

• To ensure messaging is consistent and unified, Human Resources or a management team executive should lead the conversations about the layoffs. Additionally, consider briefing and/or providing direct managers with talking points about what the staff reductions mean for remaining employees and the company moving forward. If direct managers are not involved in the layoff conversations, it is important to ensure they understand the reasoning behind them and can verbally relay that messaging to their subordinates.
• Manage the communication with requisite empathy. No matter how well a company is prepared to manage the workforce reductions or how effectively the process is handled, the reality is that employees are still losing their jobs or their coworkers. Do not attempt to deflect to another company that had a larger reduction.
• Consider key stakeholder expectations. While employees should be the priority stakeholder group when announcing layoffs, it is likely that key stakeholders, such as investors, customers, and local officials, will have questions about why the layoffs were necessary, how they correlate with the broader company strategy, and whether further cost-cutting measures will be necessary. Be prepared to proactively address the job reductions in earnings remarks and/or develop talking points to effectively and consistently answer questions reactively in earnings Q&A or during one-on-one conversations with those key stakeholders. You may consider notifying stakeholders, especially local officials, directly once employees have been notified before they go to the media with concerns or criticism.

Monitoring announcement follow-up

• Employees who retain their jobs will likely have questions about what the workforce reduction means for them, their job responsibilities, reporting relationships, and so forth. While a company’s size and culture will determine the specifics of how it communicates with employees (e.g., do they hold a company-wide town hall, do leaders provide office hours, etc.), it is critical that all companies provide a forum for employees to ask questions so they know they are being heard and leadership has a chance to hear concerns.
• While it may be tempting to correct misleading public narratives about layoffs on social channels, companies should refrain from engaging publicly on those channels, as such engagement detracts from the direct focus on employees. Instead, monitor the tone of commentary across internal and external chat and social channels, to understand what is being said on public forums and to identify opportunities to correct misinformation by communicating directly with those impacted.

Taking action with these key considerations in mind can help allay concerns and keep remaining employees engaged during a stressful period, limit negative posts from outgoing employees on public forums and decrease the likelihood of the event becoming a larger, or disproportionately negative media story. As long as the environment remains uncertain, large scale workforce reductions will remain an unfortunate reality for many companies. For employees, layoffs are never welcome announcements, but proper preparation can help minimize potential value-destructive reputational impact on employers.