Practical Tips for Communicating Layoffs

As employers, layoffs are never a first-choice solution. But they are a reality for businesses struggling to make it through the any period of economic upheaval.

Layoffs, furloughs, and reductions-in-force became a part of the “new normal” for too many during the pandemic era.

The unemployment rate in Hawaii had done a complete 180—from near record lows to new record highs. When the state’s primary economic driver, tourism and hospitality, were completely shut down for several months, recovery was years in the making. Businesses needed to swiftly pivot between mass layoffs to rehiring employees who were let go or had hours reduced in order to help get business humming again.

Fast forward to the current era of post-pandemic economic volatility, punctuating the need for businesses to remember those lessons and to remain agile and adaptable.

Which brings us to a friendly HR reminder: cutbacks to staff and hours must always be conducted with utmost respect and professionalism.

How to Inform Employees of a Layoff

First and foremost, conduct layoffs with compassion and respect. You hired the person for their strengths, so treat them with dignity when they leave. Ask yourself how you can part ways as positively as possible, given the unfortunate circumstances.

While your employee will be taking a bad blow, as the employer, all eyes are on you.

If you handle layoffs poorly, you not only burn bridges on a small island, but you also risk trashing your company’s reputation. Mistreated former employees will tell their friends and family and/or share their experience online.

At a time when your company can’t afford to mess up, the last thing you want is layoffs to become a public event. The results could be disastrous.

Before Announcing Layoffs

If at all possible, let your staff know in advance, before rumors get started, that reductions might be necessary. No one appreciates walking into work to find half the staff being cut that day. Once you’ve made the tough decision to lay off employees,

• Enlist the assistance of a human resources professional or an employment attorney to ensure compliance with state and federal laws.
• Prepare a script or talking points for communicating the decision to individuals, and make sure those delivering the message are coached in advance.
• Gather resources to assist terminated employees in job hunting and/or provide instructions on filing for unemployment.

Mutual respect is a net positive for everyone involved. How well you handle things (or not) will also have a big impact on your remaining staff, who may be more shaken up than you know.

Build on a foundation of empathy, gratitude, and respect, and much of the rest is procedural:

• Be sure layoffs are handled by managers or owners.
• Inform employees individually, never in a group.
• Explain the decision clearly and discuss next steps, such as the last day of work, final paycheck, and health insurance coverage.
• Give as much advance notice as possible. Keep in mind that federal and/or state notice requirements may apply in certain situations.
• If you choose to give advance notice, offer the option of working through the notice time period or leaving the company that day.
• Pull the Band-Aid off quickly. As much as possible, avoid recurring layoffs. If you drag them out, your staff may constantly be living in fear that they could be next.

After the Layoffs

• Communicate with vendors, business partners, and customers to assure them that their relationships with the company will not be adversely affected.
• Rebuild trust with remaining employees. Layoffs increase stress, burnout, and insecurity, while decreasing morale, job satisfaction, and trust (Harvard Business Review).
• Keep an eye out for negative comments popping up on social media or in the community. Bad reviews are not always avoidable, but they could tarnish your image with future hires when the economy picks up again. If one pops up, respond with respect and professionalism.

This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant or adviser before acting upon any information in this article.