How to lay off employees

How to lay off employees

Laying off employees is never easy – but if they’re not handled properly, things can get really bad, really quickly. In fact, in recent years, quite a few layoffs have made headlines for that very reason.

Take Sears Canada. As part of its court-supervised restructuring process earlier this summer, the department chain closed 59 stores and laid off 2,900 employees amid shock and confusion.

It then filed for creditor protection, allowing it to cut severance pay to its laid-off workers, not to mention stop retiree benefits and pension fund contributions, while offering executives millions of dollars in lucrative bonuses to stay.

The result? An outpour of anger – and not just from former employees impacted by the cuts. Customers were angry too – so much so that Sears had to disable comments on its Facebook page within a few weeks to stop the onslaught of #BoycottSearsCanada.

Or consider SoundCloud. When the music-streaming service recently lopped off 40 per cent of its staff, laying off 173 employees and closing two offices, it left everyone demanding answers.

“Exiting team members wanted to know why they weren’t warned, while those who survived the cuts wanted assurance that the cost reductions would keep the company afloat for the long-run,” wrote Techcrunch.

Remaining employees reported low morale and frustration that the company knew about the layoffs for months, but didn’t invoke a hiring freeze or cut back on expenses like free lunches.

Indeed, there are countless ways to lay off employees, whether it be the Monday morning mass email, or the ominous all-staff meeting run by Human Resources.

But if these two horror stories tell us anything, it’s that not all layoffs are created equal – particularly if your goal is to make current and former employees feel respected, and to avoid turning all your customers into fervent enemies.

So how do you achieve such lofty goals? Mary Crossan has a few ideas. As a professor of strategic leadership at the Ivey Business School at Western University, Crossan knows that there’s no-one-size-fits-all strategy to lay off employees – but can offer a few tips for softening the blow.

Plan ahead

Building a positive culture for employees should start long before layoffs, according to Crossan. For individual managers, that means developing a rapport with the people in your organization, so that “by the time you get to a situation where you might have to let somebody go, they already feel they have been treated with respect and dignity,” she says.

There are many ways to create a positive, respectful culture within your team – check out a few tried-and-tested ones here.

Be direct

Crossan says the worst-case layoff scenarios come about when there’s a lack of direct communication from a manager. This could mean employees hearing about potential layoffs indirectly from other team members; vague emails from management; or confusing all-hands meetings without additional in-depth information.

These approaches leave employees with more questions than answers – and can result in a negative experience. An in-person conversation, she says, is key.

Show empathy

No matter the size and scope of the downsizing, Crossan says it’s important to have an empathetic tone – and to treat employees like individuals, not mass groups.

In the Sears Canada layoffs, one former employee said that she was called to a mandatory meeting at the Metro Toronto Convention Centre. Once there, everybody was laid off (and given a vague info packet and taxi voucher).

While mass announcements may be efficient, they show a distinct lack of empathy for the employees being laid off. Ideally, someone who knows the individual — rather than a faceless HR rep — should be part of the dialogue.

Don’t be confrontational

This is a big one, according to Crossan. Sure, laying someone off will be an awkward experience, and will likely lead to frustration, anger, and possibly even altercations. After all, you’re delivering some incredibly bad (and possibly totally unexpected) news.

But as the employer or HR leader, it’s important to keep your cool and stay professional. Be sensitive to the tense nature of the situation, and don’t intensify the situation more than necessary.

Follow up

Another major criticism of the Sears Canada layoffs was a lack of information and support for employees that were let go. Crossan says there should be some kind of follow-up to make sure that laid off employees know their rights and their options – and to simply make sure they’re doing okay.

“People feeling like they’re not abandoned in the process is part of their respect and dignity,” Crossan explains.

Check in with the rest of the team

After the Soundcloud layoffs, employees that remained were desperate for information about what was going on with the company. But at an all-hands meeting a week later, there was still an air of confusion, fear, and frustration.

Layoffs will always be a tense situation, but providing remaining employees with as much information as possible with help to soften the blow. Encourage managers to check in with their remaining team to address the loss, and to explain the plan moving forward.

See also:
The best day to fire someone
How to tell a new hire they didn’t make it past probation


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