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A Comprehensive Guide to Managing Layoffs

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A Comprehensive Guide to Managing Layoffs

As the 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.

Layoffs are 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 current global recession is forcing businesses to scale back operations due to the decline in the demand for most products and services.

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With diminishing revenues and poor prospects, most organizations are struggling to stay afloat during these extremely difficult times.

This has led organizations to adopt harsh cost-cutting measures.

Organizations often end up downsizing the workforce as one of the most common steps.

The decision to lay off even a small percentage of their workforce can result in considerable savings for the organizations and help them 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 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, if handled improperly, it can cause a major dent in their goodwill as an employer and impact their recruitment efforts once the economy revives.

Hence organizations need 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 seems to be perfect.

Every organization needs to develop its strategy to handle this sensitive issue in a manner that makes it less stressful and demoralizing for everyone involved.

Having said that, certain aspects of managing layoffs 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

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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 as soon as possible.

This gives the employees enough time to look for other options outside the organization in case of a layoff.

The organizations should also ensure that they are as transparent with their employees as possible 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 that the employees would want to know the rationale behind the decision of the organization to let them go.

The management should 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 credibility in the eyes of the employees.

4. Offer emotional support and guidance

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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.

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 counselor for this purpose.

The organizations can even assure the employees of re-hiring 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 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 the organization still cares about them and they are ready to support them even at this critical juncture.


Organizations need to minimize the impact of layoffs on 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.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.