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Companies Must Do Better: Learnings From Recent Layoff AnnouncementsFebruary 27, 2023

There is no easy or ‘right’ way to tell people they are losing their jobs, but how you communicate this tough decision still matters, deeply.

Layoff announcements demand a thoughtful, empathetic and targeted plan that carefully considers the employees who were directly affected, of course, as well as all other critical stakeholders. Without one, companies risk exposure to long-term reputational and business consequences, making it harder to attract and retain talent, build positive brand perception and even drive the growth and innovation needed for the business to rebound. Business and reputational impact aside, making hasty or thoughtless layoff announcements presents negative long-term effects on employees directly and indirectly affected.

We recently witnessed – and thousands experienced first-hand – some of the most admired companies in the world do just that. For example:

  • Consulting company McKinsey & Co is one of the latest companies facing scrutiny after confidential sources disclosed the company’s ‘Project Magnolia’ or its plan to cut 2,000 jobs to, as reported, “help preserve the compensation pool for its partners.”
  • Recently reappointed CEO of Disney Bob Iger announced 7,000 layoffs during an earnings call. Critics claimed that a company with a mission built on entertaining and inspiring people left its own in the dark about their future and where employees stand in the ranks of priority.
  • Although Salesforce CEO Marc Benioff made an announcement prior to discussing recent layoffs during a two-hour all-hands, he was criticized for avoiding questions about the layoffs and making situationally insensitive remarks, forcing themes of ‘family’ or “Ohana” - what Salesforce refers to as its workforce - into a discussion focused on job cuts.

This raises the question: How can some of the world’s biggest companies - with substantial resources - make such egregious and short-sighted errors? While there are many factors and considerations at the core of these business decisions, companies must remain laser-focused on the foundations of their company culture and prioritize communicating to the right stakeholders, at the right time, with the right message.

An Opportunity for Companies to Do Better Moving Forward

As the economic outlook remains uncertain, companies will continue to face tough workforce decisions. Here are a few learnings from recent layoff announcement missteps for companies to keep in mind going forward:

Be Human.

Following some of these recent announcements, I can’t help but think what if that were me? And that’s the point: exercise empathy. These people are not just employees, they are human beings with families. Companies should think, act and communicate in kind as they roll out their announcements, ensuring the conversation about the employee’s exit receives the time, attention and personalization it deserves. You may not know what the future holds for affected employees, but when communicating these decisions, it’s important not to overlook the time and effort they contributed to building your company into what it is today. They deserve – and their colleagues expect and need to see – respect and dignity in this process.

Audit and recalibrate the importance of active investments, programs and initiatives to ensure your actions align with your words.

A celebrity endorsement. A splashy billboard campaign. An offsite executive retreat. No one wants to see non-urgent or inconsequential initiatives or investments launch while they find out they are losing their jobs. Prior to announcing layoffs, conduct a holistic audit of all internal and external, planned or active company programs, initiatives and investments across the business and ensure all non-essential investments are revisited and paused where necessary.

Prioritize stakeholder communications planning that considers all stakeholders in your business ecosystem and the personal impact.

Take the time and care to build a purposeful, targeted plan informed by inputs, such as:

  • The stakeholders impacted - directly and indirectly. What and how will we communicate this announcement to those directly affected? What other stakeholders – layoff survivors, customers, and partners – will be impacted by this announcement and what does it mean for their daily responsibilities or expectations in the future? Factor the full range of your stakeholders into your planning efforts, placing top priority on the affected employees. In addition, ensure there is a focus on keeping layoff survivors engaged in the long-term, as well as planning more broadly to rebuild your workforce when your company comes out on the other side. For layoff survivors, specifically, providing open, transparent communication and frequently engaging in meaningful ways will be critical to building back trust, morale and retaining talent.
  • Laser-focused audiences, messages and delivery. It happens all the time. You begin with a defined key message, laser-focused on directly affected employees and with every team review or document edit, the message slowly loses humanity, empathy and focus. Companies must remain vigilant in those moments on every word edit and stay focused on the priority audiences. And when it comes to delivering the message, don’t minimize or compare your decisions to other companies, own them. Be forthright and transparent about the rationale and articulate the other options considered prior to determining a workforce reduction as the only path forward. Also, be clear about next steps and resources available to affected employees as they undergo this transition.
  • The cadence and channels of communication. Your employees shouldn’t find out for the first time about life-altering news in a group or public setting, or via a company-wide email communication. As much as it’s possible, meticulously plan and deliver notice individually and face-to-face prior to company-wide announcements. It can be costly and time-consuming especially considering multiple geographies and types of employees – but while challenging it pays dividends to do it right. Follow the individual discussions with a communication from leaders at the forefront of your business with the rationale for the decision. Subsequently, ensure a leadership team member and/or HR shares personalized information about what the employee can expect and where to go to get questions answered moving forward.
  • Programs and initiatives offering support to impacted employees. Are there programs and initiatives that already exist at your company, that can be leveraged through a partner organization, or that you can develop to place or provide additional skills training for employees who have been let go? What about programs and initiatives to support layoff survivors? Companies should lean on existing or build new resources to support employees as they face the effects of a workforce reduction. Securing programs and initiatives before notifying employees should be prioritized to ensure they have immediate access to these resources.

Leaders must lean in and lead.

The best demonstrations of leadership often come at the hardest times. Communicating these decisions are not the moments for leaders to hide by passing navigating the fallout on to other colleagues to handle. Employees expect leaders to address the matter head on. This will define your leadership - accountable and responsible in good and bad times, a leader who is connected and empathetic to employees in the toughest moments.

To be clear, how you announce layoffs does not remedy the real, adverse effects of these decisions, nor does it dismiss the fact that someone’s life has been flipped upside down. But how companies communicate them matters profoundly and should be done with care, deep consideration and thoughtful planning for those affected. Doing so is not just the right thing to do but will position your company to rebound from a tough chapter faster and with resilience.