How to lead through layoffs

Managing through downsizing, a shift, or simply having to lay off jobs, is a very tricky position to be in. The best leaders still need guidance to keep your team headed in the right direction.

Employers turn to a reduction in force when faced with a reduced demand for their products and services or when expenses exceed revenue. Generally, layoffs are unrelated to the affected employees' performance, but sometimes companies consider a RIF an opportunity to lay off underperforming employees. Layoffs are never fun but are a reality of the business world. On almost a weekly basis, we see another large company cutting its workforce. The tech company layoffs hit too close to home for many of us. So how can you successfully lead your team through a reduction in force (RIF), aka layoffs?  

Make communication a priority.

Communication with your team is essential but becomes your #1 priority during challenging times. If you don't provide details, your team's assumptions are theirs. Most people imagine the worst when they do not have the correct information. Be honest and transparent about the situation and the company's rationale for the layoff. You should expect a wide range of responses and emotions. Was your team directly affected? Are some members of your team friends with coworkers that were laid off? How did executive management handle the situation? These things (and more) will affect how your team feels about the news.  

Your ability to communicate effectively and regularly with your team after the layoffs will prove invaluable in the long term. People have signs of anxiety, lack of commitment, and decreased productivity and creativity. In the weeks and months that follow a layoff, robust leadership strategies are required to help your team focus on the priorities at hand and to recommit themselves to your mission. Your leadership will be vital in helping your team to recognize and deal with their emotions. Listen well and listen often.

Allow time to find a new normal

Some of your team, perhaps even yourself, will resist change, and layoffs may be a significant change for your team. Layoffs may create fear, which can undermine daily work and lead to a loss of productivity. There may be gossip, rumors, and lots of lost time. People may begin to see colleagues as competitors, eroding the culture and spirit in your group. As a leader, it's essential to understand these realities and help your team overcome these challenges.

Try to identify key people struggling with the transition and contact HR or your peers to learn what coaching is available for those individuals. Involve your team in critical decisions. Ask your team questions. Ask for their ideas. Ask them what they need and what they want. Even if you can’t accommodate them, asking shows that you care.

After a company downsizes, it will take time for everyone to adapt, but a new normal will eventually emerge. The right plan will define new roles and responsibilities more clearly. Employees will develop competencies in new tasks. They’ll also feel more confident in their role. This helps them regain their sense of trust in the company. It may take time, be patient.

Evaluate workloads

Some people on your team may wonder, “How will I maintain quality and get it all done?” People may panic at the thought of absorbing additional responsibilities. It's your job to manage your team's workload and look for cognitive load overload. Talk to your team, and ask them how their workload is. Ask your team what they love about their job and what scares them about the work you want them to do. Their perspective might offer insights you did not anticipate or solutions that will be better for everyone involved.  

Meet with your team regularly to reinforce departmental goals, responsibilities, and your mission. Anticipate that there will be hiccups and setbacks in the beginning, and ensure everyone is on the same page throughout the transition.

Common reactions of remaining team members

Employees who remain in the organization (yourself included) will experience a wide range of emotional reactions to the reduction in the workforce. You should be prepared for a mix of emotions. Employees can experience a range of emotional responses during layoffs, and it is challenging to predict how each employee will react to the news.

Uncertainty, Fear, Insecurity

People are anxious about their jobs' future and fear “who’s next?” As a result, there may be an increased self-absorption and a focus on job security where people begin to care less about the organization's future. Some people feeling really scared may choose to work long hours, thinking that the organization won’t take away their jobs. Some experience confusion about their future role. There may be a tendency to avoid risk-taking due to skepticism around why certain people were let go and why they were retained.

Betrayal, Unfairness, and Distrust

Some may question the credibility of executive management. Others may believe senior management made poor choices regarding who was let go. Research has shown that perceptions of the “fairness” of a workforce reduction process tend to influence retained employees’ commitment to an organization. Others may not feel safe enough to openly express these emotions within their organization. Phycological safety is critical for your team during this process. It may be argued that the feelings openly expressed aren’t the ones you worry about. The latent issues of resentment and lack of trust must be addressed. Confidence can be diminished among coworkers, and people may become suspicious of the leadership.

Guilt, Sadness, and Depression

Employees are drained and want it to be over. Some may experience poor health and sleeplessness. Others may experience decreased motivation to work hard. (They perceived that their coworkers worked hard, put many hours in, and “Look what happened to them.”) Some may feel guilty about retaining their jobs while their friends are forced to look for other positions. Others may mask sadness, stress, helplessness, and guilt to fit in. They may demonstrate false group bravado or “hang tough” after a workforce reduction.

Anger, Frustration, and Resentment

Anger is an appropriate feeling for an employee—some of your remaining terminated people are those who were terminated. There may be a perception that people received generous layoff packages and were helped to find new jobs. Some may resent any new work they must now assume from displaced workers.

Optimism & Continuing Commitment

Some team members may believe that brutal actions have been taken and the organization is now on a painful but clear road toward recovery. Not all responses are negative. Some may even feel “charged up,” finding new excitement in their work, challenged by the prospect of “doing more with less” or saving the organization. Others are relieved that they “made the cut.” This may exist particularly where it looks like the company is heading in a new direction.

Summary

Layoffs are always brutal, even when you treat the departing employees kindly and respectfully. But remember, the layoff process doesn’t stop after the day it is done. In many ways, it is only the beginning of the opportunity to focus on your current team, keeping them engaged and centered on doing their best work to support an ever-changing business. If you’re a strong leader with compassion and empathy, the layoff process will likely take a toll on you, no matter how capably you handle it or how much you accept it intellectually. Take care of your team and take care of yourself.