October 6, 2020 0 Comment

A Comprehensive Guide to Managing Layoffs

The COVID-19 pandemic has been responsible for causing one of the worst economic recessions that the world has ever experienced in current times. As recession sets in, organizations are laying off a large number of employees across the globe. This comprehensive guide to managing layoffs should help organizations in this context.

The very process is quite challenging and stressful for the employees. Hence, it is advisable that organizations handle the process in the right manner.

Why are organizations laying off employees?

The economic impact of COVID-19  has been catastrophic; triggering one of the worst recessions. The pandemic had forced businesses to shut operations for weeks, caused serious disruptions in supply chains.  The demand for most products and services has seen a nosedive.

With vanishing revenues and poor future prospects, most organizations are struggling to stay afloat during these extremely difficult times. This has led organizations to adopt really harsh cost-cutting measures.

Downsizing the workforce is one of the most common steps that organizations are being forced to take. The decision to layoff even a small percentage of their workforce can help organizations save a considerable amount in lieu of the salaries and benefits being provided to these employees and hence can stay afloat longer.

Why should organizations handle layoffs properly?

The decision of laying off the employees is often a tough one and extremely traumatic for the employees. Hence, handling it in the right manner is extremely important. Sadly, there are many recent examples of many organizations adopting a casual and uncaring approach to handling this extremely sensitive matter.

They seem to overlook the fact that this attitude is likely to cause serious financial, emotional, and mental distress to the employees. Moreover, handled improperly, it can cause a major dent in their goodwill as an employer and impact their recruitment efforts once the economy revives. Hence it is extremely important for organizations to be more empathetic in their approach towards managing layoffs.  

How can organizations handle layoffs more effectively?

When it comes to managing layoffs, there is no single method that can be deemed as perfect. Every organization needs to develop its own strategy to handle this sensitive issue in a manner that makes it less stressful and demoralizing for everyone involved. Having said that, there are certain aspects of managing layoffs that are common across all organizations.

The following comprehensive guide to managing layoffs discusses five of these most important aspects:
How can organizations handle layoffs more effectively?
1.     Share the bad news as early as possible

It is extremely important for organizations considering the plan of laying off employees to share the news with the members of the workforce at the earliest. Rather than waiting until the last minute, organizations should inform them when the process is initiated. This gives the employees enough time to look for other options outside the organization in case they are laid off. The organizations should also ensure that the employees are kept updated about any new information about the process.

2.     Communicate the news sensitively

Once the decision to lay off an employee has been made, it is the responsibility of the organization to communicate the news personally. It is far better for the management to communicate the news to the employee on a one-to-one basis rather than in a group or over email or text message. Such an action is not just highly insensitive but also rude. It sends out wrong signals to not only the outgoing employees but also those who have been retained.

3.     Discuss the reasons honestly

It is quite likely for the employees would want to know the rationale behind the decision of the organization to let them go. It is advisable for the management to articulate the reasons for layoffs directly and honestly. This helps in upholding the sense of respect and trust of the employees for the organization to an extent. When the management avoids answering such questions or provides vague responses, it leads to a loss of their credibility in the eyes of the employees.

4.     Offer emotional support and guidance

Communicating the news of layoffs can cause much stress and anxiety to the employees in question. This is especially true in the case of employees who have had a long history of association with the organization. In such emotional support and guidance to the employees offered by the organization can go a long way in reducing their levels of anguish and stress. The organization could even utilize the services of a professional counsellor for this purpose. The organizations can even assure such employees would be being given preference once the business prospects improve.

5.     Provide outplacement support

The practice of providing outplacement support had gained popularity during the economic recession of 2008-2009. Outplacement support can be provided to help employees get new jobs in similar profiles, offer them guidance about available options relevant to their skills, and experience, or even to help them enhance their skills to look for new opportunities. Such initiatives can help assure employees that they are still cared for by the organization and they are ready to support them even at this critical juncture.


Organizations need to minimize the impact of layoffs for their employees and for themselves – so they can maintain the respect, morale, and support of the remaining members of their workforce while making the situation less traumatic for the employees being laid off.

To stay updated on the latest HiFives blogs follow us on Twitter (@MyHiFives)

HiFives (https://www.hifives.in) is an employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. The platform enables supervisors and co-workers to nominate, recognize and reward employees using a points-based system. Budget management, jury-based evaluation and multi-level approval workflows are built into the platform. HiFives has social features such as a wall of fame and gamification features such as leaderboards, e-certificates and digital badges. It also has a global redemption system with country-specific e-gift card options. HiFives integrates with all leading HRMS systems, Office 365, Google Workspace, MS Teams, Slack and other popular tools used at the workplace. HiFives is used by many large enterprises, small businesses and startups across 25+ countries in the world, in many industries including manufacturing, retail, technology, financial services and media.