With massive layoffs making the headlines every other day in this economic climate, company leaders are finding themselves in unenviable positions. 

Ethan*, the CEO of a multimillion-dollar business, has likewise been made the bearer of bad news. As his company has missed its financial target for more than half a year now, he and the executive team would have to cut 30% of the current workforce.

Challenges of conducting layoffs

CEOs, directors, and managers navigating a layoff exercise struggle with:

Personal emotions

“I feel that I’m letting people down.” Ethan showed up in our session with baggy eyes and his head hung low. “For a long time, we believed in a people-oriented culture and focused on building a community within the company. We described and promised this vision to our employees when they got hired. But now, we are breaching our promises. It feels like I ‘fooled’ them.” 

Ethan was washed over by his guilt, and he is certainly not alone. CEOs and directors in similar positions experience a range of emotions like guilt, anxiety, sadness, and even grief. All that while contending with the practicalities of a layoff.

The backlash from affected employees 

“I don’t know what people will think of us and our company after this. We took pride in a people-oriented culture and our company reviews were full of positive feedback from happy employees. But now it’s all gonna go away. They will hate me, hate us.” 

His concerns were not unfounded. Layoffs can trigger frustration, disappointment, pain, and anger among affected employees, and a company’s reputation can suffer temporarily. 

Anxiety among “surviving” employees

Remaining employees have to contend with layoff survivor guilt, which makes them question why they were kept while their peers were let go, as well as anxieties about their job security down the line. 

“Since the start of the layoff, the air in the office building feels so heavy. Even though nobody is talking about it, I know they are freaking out.” 

Work performance may take a hit, and a reshuffling of roles and responsibilities only adds to the confusion, disruption, and instability. When company loyalty is shaken, some employees may start looking outward. 

How to conduct layoffs fairly and kindly

“If we have to lay off employees for the company’s survival, how can I do it in the least disruptive and most supportive way?” Ethan asked. 

Apart from severance, resources such as financial consultancy and career coaching can also be availed. In supporting affected employees and protecting the company, here’s a list of considerations for CEOs, directors, and managers:

Prepare for the meeting

What you say is just as important as how it’s said. Delivery affects how the affected employees receive and respond to being laid off, and here are some factors leaders should consider when setting up these meetings. 

Timing: Since affected employees need time to process the news and regulate their emotions after the meeting, meeting early in the day ensures that they have enough time to collect themselves, pack their belongings, and bid farewell to their colleagues before leaving the office. 

Setting: Privacy is key when letting go of employees as it allows them to express their emotions away from prying eyes. Public spaces within the office and meeting rooms with glass windows that can’t be covered should be avoided. 

Preparation: It’s easy to forget important details when you’re under stress, and these meetings are no walk in the park for the bearers of bad news. An outline or script ensures that key points are communicated clearly and effectively, especially if it’s your first time in this position.   

Prioritise transparency 

“Why me?” is among the first reactions among affected employees. Naturally, Losing a job creates self-doubt about one’s competence at work. 

Help employees understand that a layoff is never attributed to a single individual, team, or department. It’s a combination of factors and circumstances, and company leaders are responsible for communicating them. The last thing we want is for affected employees to take a layoff personally, or assume they were “chosen” for their incapability.

Offer support and resources

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” 

At this juncture, employees don’t only need the fish in the form of a severance package. They need help with fishing, too, and future-oriented support can go a long way. This could look like this:

• Offer networking resources;
• Provide recommendation letters;
• Review their work and help them identify the skills and strengths for future jobs;
• Career coaching sessions and workshops;

When a layoff is handled well, companies can minimise disruption to the lives of affected employees and the impact on their reputation. 

Follow up with remaining employees

In Ethan’s words, “they are freaking out.” How can companies restore safety, stability, and trust among employees after a layoff? 

“Surviving” employees” can still be affected in different ways, but holding meetings to address their concerns and questions candidly ensures there are no guessing games moving forward. 

How leaders can practise self-care

Process your emotions

While leaders may “brush off” their guilt, sadness, and grief in the name of professionalism, they have to acknowledge that these emotions are normal responses to the situation at hand. If anything, they come from a place of care and empathy towards employees.

Instead of dismissing their feelings, this is a great opportunity for leaders to practise emotional regulation, self-awareness, and self-compassion. Make time and space to process the layoff on a personal level, or use coaching as an outlet to do so. 

Create and utilise support systems

A layoff doesn’t have to be an isolating time for company leaders. In group therapy, people heal by sharing similar experiences and validating each other’s struggles. Discussing coping mechanisms also instils hope that the seemingly insurmountable challenge can be overcome. 

Likewise, CEOs, managers, and directors can benefit from coming together. Meetings within the leadership teams can provide a safe space for them to feel heard and supported on issues they’re not at liberty to share with others.

Don’t be over-responsible for the situation

Our emotions can be very persuasive. Overwhelmed with guilt, company leaders may be compelled to go out of their way to help affected employees. However, they should be mindful of professional boundaries and assertive about the company’s decision. 

While companies can offer tools to help their employees, they are not expected to be these tools. Rather than assuming the role of career counsellors, managers are better off referring them to trained professionals and other resources.

With this list in mind, Ethan announced the second round of layoffs last month. We haven’t met since, but I looked up his company’s reviews out of curiosity. A recent submission popped up: 

“Had a great time here. It still sucks to be laid off. And I’m still feeling sad about having to say goodbye, but grateful for being treated with respect. All the best.” 

I guess Ethan did a good job. 

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Xiao Ling, Executive Coach

As a seasoned psychotherapist and executive coach, Xiao combines her expertise in psychology with leadership coaching and brings a unique perspective to the business world. 

Based in New York with a global reach, Xiao has worked with clients from various industries, cultures, and backgrounds, gaining a deep appreciation for the unique challenges and opportunities that arise in different cultural contexts...