Managing Downsizing: 4 Insightful Tips for Employee Layoffs

October 28, 2022by Valerie Dansereau

Businesses make the decision to downsize staff for many different reasons such as economic decline, mergers and cost-cutting. When companies need to reduce expenses, there’s a good chance cutting staff is considered and may be implemented. One of the least pleasant parts of a career in management is being responsible for laying off staff. While it’s not easy to have difficult conversations or let an employee go when performance has been poor, it can be even harder to let hardworking, productive staff go.

It’s important to think through how to handle downsizing the best way possible, for the sake of the employees who are affected and for the sake of the organization. Poorly managed downsizing can damage morale. Employees that remain may feel angry, demotivated and hopeless. While downsizing staff is never pleasant, there are a few things to keep in mind as you transition through the changes your company is going through.

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Communicate with Clarity

Rumors can be rampant when a company is downsizing. It’s imperative that you communicate information to your staff as soon as you can rather than having them observe whispering or meetings behind closed doors. The more transparent you are about what’s going on, the more you may be able to prevent rumors from spreading like wildfire, which greatly increases anxiety.

Be honest about any hard truths and clear about who might be affected. Let them know why the company came to this decision, especially if their performance had no bearing on the decision to lay them off.

Be Empathetic

Employees who are being directly impacted by a layoff will have a lot of questions and will want to talk. Have an open door policy and make yourself available to listen and to answer questions as well as you can. As you listen to their concerns and their fears, treat them with compassion and respect. Some may be highly emotional, and it’s important to let them express what they’re feeling and be respectful and compassionate.

Provide Resources to Those Being Laid Off

As a manager, you may not be able to save staff from being included in downsizing, but that doesn’t mean there’s nothing you can do to help good employees. Provide a written letter of recommendation to help make it easier to find a different job. Suggest other companies in your industry that might have opportunities, especially if you have contacts at the other companies. If your organization provides job assistance, resume preparation or outplacement, encourage them to take advantage of this assistance.

Continue to Support Your Remaining Staff

Managing downsizing isn’t only about those that have been laid off. You’ll find there’s a different set of concerns for those that are remaining at the company and you’ll need to be available and empathetic to them. They may be fearful that their job is in jeopardy in the near future or they may feel guilty that they weren’t selected to be let go. They may experience a lot of grief in losing the daily connection with coworkers who have been downsized. Give them opportunities to vent their feelings.

As a manager, you may find it challenging to motivate your remaining staff to be productive. Work with your company to find out if there are perks you can offer them such as flexible work schedules. If your company has an employee assistance program, encourage employees that are struggling to take advantage of it. Have both team and individual meetings more frequently, and communicate clearly if job duties may change

If your company is going through downsizing, it can be an emotional and stressful time. For consulting on downsizing, reach out to Pollack Peacebuilding Services.

Valerie Dansereau

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