are faced with difficult decisions as they navigate
their organizations through the uncertainty of the
economic crisis and financial turnaround process.
For many organizations shrinking bottom lines have
meant layoffs. While slashing jobs seems like the
most expedient method to reduce costs in the short
term, the long term impact may increase costs in
ways often ignored in tough times. The human costs
are hard to measure but can be staggering in terms
of the psychological, emotional, and physical toll.
There are multiple facets to the layoff story which
include the most obvious—the impact on layoff
victims and survivors. Effective leaders recognize
that they must manage all sides of the story well to
maintain the overall health of the organization and,
most importantly, the people.
Anticipation of Layoffs Starts with Budget Cutting
leaders start talking about income and revenue
shortfalls and ask staff to recalibrate their
budgets, the anticipation of layoffs begins. At this
poit, fear heightens anxiety levels as people deal
with the possibility that jobs will be cut. If that
fear and anxiety are not managed, it can dominate
the attention of everyone and become the central
distraction that disables people’s ability to
concentrate on their work. The result is doom and
gloom with a loss in productivity. And, worse yet,
the top talent may leave. So, before the layoff is
actually announced the organization has already
begun to incur the costs of lower morale, less
productivity, and a talent drain. The leadership
lesson here is to be conscious of the impact of
budget cutting on the workplace culture. Leaders
need to focus on constructive communication and
engagement of the collective wisdom which can help
lessen fear and anxiety. Here are a few tips on how
to manage the process:
Acknowledge and respect the emotional impact of
the circle of inclusion and seek help with the
Communicate often. Transparency is essential.
Engage staff in dialogue about the process. Create a
safe space for staff to talk about their thoughts
Listen with empathy and provide support.
Layoff Announcement Impacts Culture
layoff announcement can have a significant impact on
organizational culture. That communication sends a
critical message about how the organization treats
people. And, when the communication is not managed
well, feelings of uncertainty and insecurity deepen
the escalating stress. Multiply these feelings times
the number of employees and what you get is a pretty
stressed out work environment. So it is really
important to reflect and think carefully about what,
how, and when you announce the layoff.
Consider these suggestions. Communicate with empathy
demonstrating sincere understanding that this is a
highly emotional time and how difficult the message
is to accept. Emails and text messages cannot do
that effectively. When the message is serious and
will have a personal impact, face-to face
communication is best. Also, large group or mass
meeting formats minimize the opportunity for people
to ask questions and can be impersonal. Managers and
supervisors of workgroups can be trained to deliver
the message and/or follow-up on the
organization-wide announcement from top leaders.
Managing transitions and reactions to the
announcement would be helpful to include in that
training. Good communication needs to connect with
hearts and minds. Remember the communication basics
Victims’ Stories Linger
layoff victims’ stories linger for a long time in
the organizational memory. You may have had them
clean out their desks, taken away their keys, and
escorted them out of the building, but the
friendships and relationships do not end there. The
spirit of the people leaving hangs on. So it is
really important to treat them with dignity and
respect. First and foremost, do it because it is the
right thing to do. And, keep in mind, the entire
process is being witnessed by people inside and
outside of the organization. On the inside,
coworkers and friends are grieving and observing how
the layoff process is being managed. They are
translating their observations into judgments about
leaders and the organization. What gets translated
gets transferred into the work environment. Outside
of the organization, victims are telling their
stories to everyone they know. The victims are now
your public relations representatives.
about the stories that you want people to tell. A
suggestion is to put yourself in the victim’s shoes.
Imagine how you want to be treated. How do you want
to be managed in this situation? Write down your
thoughts. These reflections can serve as your guide
for managing layoff victims with kindness.
Survivors Syndrome Looms Large
business as usual attitude does not erase the damage
and hurt that are caused by layoffs. In fact, that
attitude can make a bad situation worse. Survivors
are coping with the loss of friends, coworkers and
business as “unusual”. David M. Noer, in Healing the
Wounds labeled these reactions as “layoff survivor
sickness”. After listening to many survivor stories,
he learned that they feel anger, depression, fear,
anxiety, and distrust. Lean and mean does not lead
to gratitude or just being thankful to have a job.
To the contrary, a recent study conducted by
Leadership IQ, a Washington, DC based consulting and
research firm, found that surviving workers shared
similar feelings as those in Noer’s study--- guilt,
anxiety, anger. In addition, research from the
institute of Behavior Science at the University of
Colorado- Boulder found that there was a
relationship between job security, job demands, and
role ambiguity and the physical and mental health
effects of layoff survival. Given these findings, it
is clear that layoff survivors need help to deal
with their feelings. And if do not get it, there
will likely be a negative impact on productivity,
quality, service and the work environment.
takes more than employee assistance program (EAP)
services to deal with these issues. The EAP is
important but can only go so far. These services are
focused on individuals and can certainly help them
cope with their feelings. However, revitalizing the
organization after a layoff requires rebuilding the
team and collective spirit. Consider doing the
Facilitate processes that support grieving and
provide a positive space for emotional release
associated with loss.
up interpersonal skills and build positive
Communicate honestly to rebuild trust.
Create a shared vision for the future without making
promises you may not be able to keep.
Reenergize a mutual commitment to mission.
Re-clarify roles and responsibilities to help
minimize role ambiguity.
Provide relief for increased job demands recognizing
that doing too much with less will lead to burnout.
Empower people by deepening their involvement in
decisions that affect them.
leadership imperative is to balance achieving
results with concern for people. Organizational
survival depends on them. Financial turnarounds
cannot be achieved when the people who are
responsible for making that happen are suffering.
Broken spirits do not produce targeted results in
the long term. Reviving the organization requires
compassionate transformational leadership that helps
breathe new life and vitality into a difficult
situation. This is accomplished by treating people
well and engaging them in the change process. In the
end, leadership creates the story.
is the Managing Principal of D. Dixon & Associates,
LLC. She is also a consultant, guest lecturer, and
writer. Diane specializes in leadership development,
change management, strategy development, and team
building. She has more than 20 years of experience
working with corporations and not-for-profit
businesses of varying size, industry, and
complexity. Diane’s articles have been published in
a variety of practitioner journals on such topics as
executive leadership in healthcare organizations,
leadership and culture alignment in partnerships,
leadership in mergers and acquisitions, and the
field of human resource development. For article
feedback, contact Diane at