How to conduct compassionate layoffs & boost morale in their wake

Layoffs have become endemic across many industries — including mass events affecting tens of thousands of workers. So it’s more important than ever to conduct compassionate layoffs.

In 2022 alone, it’s estimated that over 150,000 employees lost their jobs in the tech industry, with another 77,000 released in the first two months of 2023. While trimming corporate ranks may sometimes be unavoidable in an economic downturn, companies do have a choice in the way that layoffs are handled.

When it comes to thinking about what employees experience from being let go, many employers need to do better.

The first thought of many employers when shedding workers is about salvaging the business’s longevity— but this is the wrong way to look at things. What many organizations get wrong is to over focus on efficiency at the expense of empathy, based on the faulty assumption that empathy and efficiency are mutually exclusive.

In reality, having empathy through compassionate layoffs paired with concern for those still working can create a stronger culture of connectivity. Employees who feel seen and cared for will often do far more for your company than those you appeal to solely in terms of company productivity. What’s more, by taking steps to boost the morale of your remaining workforce, you’ll create a positive company culture and make it more likely that the organization can avoid further layoffs.

What to avoid

Poorly handled layoffs executed without compassion can quickly create a toxic environment for employees, as internal turmoil breeds a culture of fear and defensiveness in the wake of downsizing.

Bad layoffs can result in negative press on both a small and large scale and can rapidly morph into a capsized brand image. Company reputation and hiring ability will also be affected if employees are not treated with respect and dignity during times of transition.

This can happen from the double-whammy of altered perspectives, which begins when those who are laid off end up exiting with a disparaging view of your company.

Those who stay — and whose day-to-day work lives are altered not only by the loss of their colleagues but disappointment with how laid-off employees were treated — see the company differently too. They can be overwhelmed with corporate survivor’s guilt. Without compassion during the layoff process, your company will continue to hemorrhage employees, including the critical stars you selected to keep on board.

What do compassionate layoffs look like?

Compassionate layoffs keep the employees — not the company — front and center by considering the mental, emotional, social and physical needs of those who are the victims when an organization is forced to conduct layoffs.

Beginning with people as the priority has cascading effects on the entire business and can ultimately support the company’s future. Managing your layoff with compassion can minimize the losses and prevent the company’s culture and brand from taking a major hit.

When planning a compassionate approach to a layoff, be sure that sentiment starts from the top, with the CEO and leadership team. Employees need to hear not just their managers, but also top company executives, expressing true empathy.

If the communications from leadership are focused exclusively on numbers, revenue, financial runways and big-picture financial forecasts, the burden will fall to managers alone to both conduct the layoffs and convey empathy. When the conversations from senior leadership start with empathy, it can make a positive difference to employees while helping the business at the same time.

Continue support

Another facet of compassionate layoffs is considering how your remaining employees feel and how best to support them. All of the employees you’re not worried about are quietly watching the way you handle big issues as a company.

When leaders and managers show up with empathy and authenticity, it helps employees feel seen and safe. That’s why it’s critical to create a constant culture of empathy in the workplace, not just create one during a time of turmoil like layoffs. Empathy throughout the good times builds trust that you’ll need during stages of economic strain.

It’s also normal for workers who remain to experience corporate survivor’s guilt — feeling guilty about their relief for dodging the layoffs and upset that others were let go while they remain employed — and also a sense of fear that subsequent layoff rounds might still affect them.

When employers are very clear with the remaining staff about why they were selected to keep their jobs, it can help corporate survivors feel less guilt. This is particularly true if managers pair this with authentic workplace recognition for accomplishments and provide opportunities for peer recognition and communication in the wake of layoffs.

Morale boosters keep culture strong

Before, during and after layoffs in any industry, a key company priority should be to find effective ways to boost the morale and engagement of individuals and teams. Organizations need to understand that layoffs will cause a range of emotions in employees that can be influenced by various factors, ranging from an employee’s values and financial situation to how the layoffs affect them personally.

By recognizing this reality and being prepared to address it in a transparent way, employers can go a long way toward helping all of their staff make the best of a difficult situation.

Some ways to boost morale during times of layoffs include:

• Explain why layoffs are happening. Being open with clear communication about the “why” behind the organization’s decisions can make layoffs easier to process and help squash false rumors about the reasons.
• Clarify the roles of remaining staff. Quelling staff anxiety by sharing the logistics of who will do what once the layoffs are over can help people stay focused on their jobs rather than on speculations.

• Add benefits. Everyone wants to feel cared for by their workplace, so think of low-cost ways to create a more beneficial, flexible and enjoyable company culture.

• Boost creativity. Coming into work each day with the anxiety of mass layoffs can rid employees of their desire to create and innovate. Get employees excited again by renewing their enthusiasm for the job, encouraging new ideas and embracing different ways of doing things.

• Facilitate communication. Helping to create bridges between employees and their managers and peers can help replace negative feelings with support and encouragement.

To that end, one proven way that companies can proactively plan for a smoother layoff process for all is by creating channels for employees to vent to their peers and managers, with opportunities to offer help to their former colleagues. Setting up forums to share appreciation and promote connection within the company for those colleagues staying — as well as those who have been laid off — is imperative.