There is no good way to let staff go. But recent layoffs at tech giants show that there is certainly one wrong way to do it.
When Twitter recently let go about 50 percent of its workforce in a mass layoff campaign, former employees and pundits disapproved of the approach. Many of the affected employees have not been informed of their dismissal in writing or by HR; they found they were let go when they couldn’t access their work email. Others, who had been vocally critical of the new CEO, Elon Musk’s direction for the company, were dismissed outright on the social media platform. In the aftermath, several key figures resigned.
Twitter is an extreme example of how not to handle layoffs, but many companies don’t provide the necessary transparency and resources to properly manage the situation. Leading with empathy and clarity can go a long way in relieving employees affected by downsizing and ensuring that the remaining employees feel respected.
The evil of being inhuman
The consequences of poor handling of layoffs can have far-reaching consequences for companies. Research has shown that a reduction of just one percent of a workforce can increase voluntary departures by more than 30 percent in the following year – and often that’s because people don’t trust there won’t be more cuts because the leadership has taken no action. good job communicating a long term plan or strategy.
An ill-considered dismissal approach can also contribute to a poor work culture because of the pressure it puts on the remaining employees. For example, those who have remained on Twitter have reported that the loss of so many technicians has put enormous strain on the remaining staff, who struggled to keep the site running with limited resources. Another study conducted by the University of Stockholm and the University of Canterbury found that a company’s survivors experienced a 41 percent decrease in job satisfaction and a 20 percent decrease in job performance after a layoff.
There is also always the risk that disparaged employees will sue. But David Zweig, a professor of organizational behavior and human resources management at the University of Toronto, says that if people are treated fairly and with respect during the downsizing—if they are very clear about the reasons for the cuts, people can feel valued— they will reciprocate that behavior in their response. “They are much less likely to engage in things like lawsuits or even physical or emotional abnormalities that can happen with people who feel really unfairly treated,” he says.
However, companies need to make sure they are familiar with and follow the laws regarding layoffs or else they could be in trouble anyway. Twitter is now facing a potential class action lawsuit because their California staff were fired without the mandatory 60-day warning. The length of notice required depends on the jurisdiction: in Ontario, for example, an employee with eight or more years of experience must receive eight weeks’ written notice of the termination of their contract of employment.
How to fire employees with empathy
Dealing with layoffs with respect actually starts well before a downsizing period. Companies should be careful to develop a positive work culture where everyone feels supported, so that employees are better equipped to weather the storm during difficult times. “Codify your company’s purpose and values so everyone understands the organization’s common goals,” says Jenn Lim, CEO of Delivering Happiness and best-selling author of Beyond happiness. When there is downsizing, leaders need to ensure that those cuts are consistent with those same goals. That way, team members will sooner understand why layoffs had to be made.
“One of my clients, National Bank Capital CEO Joe Camberato, was so good at nurturing empathy and respect that an employee even brought him coffee and donuts the day after he was fired,” says Lim. They were eventually able to bring back the staff they laid off as the business stabilized, and now they are growing as one of the top employers in their area.
Having a plan in place that can help staff transition more easily will also go a long way in fostering a good relationship with departing employees. “The past few years have been difficult and layoffs have an even greater impact on the mental and even physical health of many people,” says Lim. Renewing health insurance, like Facebook did when it laid off 11,000 employees earlier this month, is one way companies can help. Other ways to ease the transition include offering job search tools, personalized reference letters, and emergency financial assistance for workers in need.
“Giving outgoing staff information on things like severance pay, answering questions that pop up immediately, and giving them the resources they need to recover is really, really important,” says Zweig. “All of those things help mitigate the negative impact of layoffs.”