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Top HR Strategies for Handling Layoffs

Top HR Strategies for Handling Layoffs

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Whether you live in a big city or not, headlines and news stories about layoffs have been top of mind for the past few months: “Layoffs Sweeping the US,” “PayPal’s layoffs are the latest in Big Tech’s cutbacks,” “Mass Layoffs in 2022 & 2023: What’s Next for Employees?”.1,2,3 The news can be troubling for the economy as a whole, but most importantly, for the individuals whose lives are changed by these events—the people on the other side of the job market statistics.

As a human resources professional, you’re keenly aware of the emotions behind professional situations. Managing layoffs in HR is one of the hardest parts of the job, as it can be sensitive and sometimes intense. Nobody is immune to the effects of a difficult decision that impacts people’s lives and livelihoods, but there are ways that you can approach the situation to make it better for you and your employees.

If you and your team are tasked with communicating layoffs to employees, it’s best to prepare ahead of time. Consider these HR strategies for layoffs to make it as smooth of a process as possible.

Common Reasons for Layoffs

Although layoffs are usually a last resort, they’re not uncommon. Even the biggest and most successful companies, like Meta and Google, have had to let go of employees in recent months. After considering all other options for saving money and streamlining business, these are the most common reasons executives give for enacting layoffs:

  • The company overhired in the past
  • Economic factors such as inflation, recession, supply chain issues, or new industry regulations
  • Automation/replacement of jobs with new technology
  • Decrease in demand for your business, product, or service

How, When, and Where to Deliver the News

There is some debate in the HR world about the best approach to letting someone go. For example, is it better to have the conversation face to face, or is it insensitive to have someone commute into the office just to be told they don’t need to come back? Should you pre-empt the conversation with a warning of bad news, or will that just heighten their anxiety? Talk to your team about what they think is best; it may be that you adapt your strategy for different people based on their personalities and working habits.

Some HR professionals also wonder if there’s a best time of the week to have this conversation. Should you set the discussion for a Friday so they have time to process, or should it be during the week when they can have conversations with managers, teammates, and other HR members during business hours? Again, this is something you should discuss with your teammates to align on what is truly best for your employees.

HR Strategies to Use for Layoffs

1. Be honest and transparent

Telling someone that they are being laid off is already a difficult conversation, but it can be made worse by dancing around the issue or providing vague explanations. Employees might start to blame themselves or others, which can escalate already mounting emotions. They also might wonder whether something has been kept from them, as the news is likely to come as a surprise.

If employees aren’t given the proper information about layoffs, the rumor mill will start to work overtime. This can lead to mistrust of management and a general unease about their roles or the state of the company. On a larger scale, rumors can spread to customers, investors, and shareholders, and your company might find itself in the middle of a public relations incident based on false reports. Training and education in HR law can be especially helpful because you will know exactly what kind of legal disputes can arise from job termination.

Share as much information as you are allowed to with those who are being laid off, and be sure to stress that it is not their fault. The situation is not a reflection of their skills or value at the company—a layoff is very different than being fired. Help them understand why these layoffs are happening and why it’s affecting their position specifically. With all of this on the table, be ready for some potentially hard questions in return.

Leaders should also explain “other options they considered, how they hope to not have to make the decision again and how they are treating impacted employees,” said Paul Wolfe, a human resources advisor and board member at PayScale.4

2. Show empathy

Behind the title that’s being eliminated is a real person with a life, family, friends, and financial responsibilities. Although their predicament is not your doing, they’ll greatly appreciate you acknowledging the stress and disappointment this is causing them, especially in the moment of receiving the news. Some tips you can use for delivering bad news like this is to look the person directly in the eye, use their name, reinforce that the layoff is not a reflection of their value, and give them time and space to process the information.

Avoid phrases like “This is hard for me, too,” or “If I could trade places with you, I would.” Keep the employee and their needs top of mind and at the forefront of the conversation, not your own. In that same vein, don’t make promises you can’t keep or mislead with statements that offer an alternative that doesn’t exist. Although the reality of the situation is unfortunate, a laid off employee can better come to terms with it when they have clear, direct answers.

3. Provide help

As an HR professional, you have a plethora of resources and advice at your fingertips. Refer employees to popular job boards, offer to put them in touch with other industry connections, or at the very least, let them know that you’d be happy to review their resume and give some advice. This will help them leave on a positive note and can reduce the time they spend between jobs.

“Ensure system access and removal from directories does not happen before the employees are communicated to,” Wolfe said. “I respect companies protecting their resources, but how they treat impacted employees is very telling to employees that are still working there.”4

4. Stay open to communication

Just because someone is being laid off, doesn’t mean that the relationship ends there. You might find yourself reaching back out to some of these former employees to ask them for referrals at their new company, propose a partnership, or, if the situation at your organization changes, recruit them for another position. As in all of business, it’s best not to burn bridges no matter how the professional relationship ended.

5. Follow up

The immediate communication of a layoff is important, but so is everything that comes after it. Reach out to laid off employees in the days and weeks following their termination to maintain the lines of communication. Give them logistical details they need to know (e.g., when is their last day, how long their benefits continue, severance pay, etc.) in addition to personal and emotional support. Ask them if they need anything and let them know that you’re there as a resource to help them find their next role.

HR Strategies for Retained Employees

Layoffs don’t only affect those who lose their jobs. Just as someone being laid off can feel upset, concerned, or disappointed, so do the employees that a company retains. Follow these tips to ensure you maintain a strong, cohesive workforce after a big shift.

1. Communicate honestly and openly

Once employees get wind of what’s happening, they’ll probably wonder why the company needs to enact these layoffs and whether they’ll be next. Even if their job remains, what does that mean for the future of the business? Where else will they see cuts or changes? Rumors and misinformation will start to infiltrate your conversations if you don’t get ahead of it.

Again, you should prioritize honesty and transparency to maintain trust with your current employees. Let them know if any other departments or teams are in jeopardy and how soon they can expect to get more information. If you can confidently say that these layoffs are the extent of the impact, reassure them that the company is working to regain stability and they shouldn’t be nervous. Encourage employees to talk to their managers about more detailed changes in their day-to-day work and team dynamic.

2. Stay mindful of their feelings

Even though they’re keeping their jobs, your current employees are still experiencing a significant change or transition. Those who have close relationships with laid off employees will be particularly sad, or perhaps even feel guilty. Offer them someone to talk to, encourage managers or leadership to hold personal meetings, and direct them to company benefits or resources that can help them through this transition (e.g., mental health resources). Check in throughout the days and weeks that follow.

3. Ask for feedback

Your current workforce is your best resource for finding ways to improve, especially in a momentous time like this. Gather their feedback by holding personal meetings to ask how they think executives and the company as a whole handled the situation. Is there anything they wished you’d done differently? Where did they see the most confusion or turmoil? Then, take those insights back to leadership and the rest of your HR team to discuss and make a plan for the future.

4. Redirect their energy

Layoffs are usually in service of a larger goal to get a company back on track. Try to rally remaining employees around that common vision and highlight the importance of their work. Remind them of opportunities for growth and advancement within the company, as well as all of the ways in which you’ll help them define and increase their value here. Your team could also consider offering incentives, such as retention bonuses or stock options, to employees who stay with the company during the transition.

Guide Your Employees Through Thick and Thin

Layoffs can be difficult, but they create a prime opportunity for HR professionals to step up and lead their business into a new era. In times like this, you’ll need to rely on your years of experience and specialized expertise. Cutting ties with previous employees while maintaining strong relationships with those who remain isn’t an easy feat, but it will give you invaluable skills to carry throughout your career.

The University of Pittsburgh’s HR Law specialization, paired with the core Master of Studies in Law (MSL) curriculum, prepares you to be an authority on HR law who can effectively plan for and navigate legal issues that arise from layoffs, firings, hiring, and more. To help you determine if this degree is right for you, our admissions advisors are always on standby to answer your questions, explain course options, and discuss career resources. Schedule a call today.

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