Layoffs can become necessary for a variety of reasons, and with a volatile economy or unexpected crisis, sometimes your company will be left with no choice. Hopefully, we never experience the extensive layoffs we did during the pandemic, but the key is to be prepared when the time comes.

Part of being ready for even the worst-case scenario is to have a layoff management playbook in place. While nothing will make the process more palatable to employees or managers, effective strategies can reduce stress and anxiety.

Recognize the Process Will Not be Easy for Anyone

First and perhaps most important is to recognize early on that the layoff process will not be easy on anyone in your company, from HR to managers who have to make critical decisions to displaced employees, even if that is temporary.

If a layoff seems imminent, bring those who must make decisions and pass along the news to your staff together. Establish a consensus about how the process should be dealt with so that everyone is on the same page. A united and positive management team can make a huge difference throughout even the most painful of times.

Explore all of Your Options

Secondly, explore all of your downsizing options. If it is possible to avoid at least some of the layoffs, determine the best way to do so. Consider:

• Furloughs: Unpaid time off that doesn’t impact your employee’s status. Some companies will do short-term furloughs for the entire staff, or they will implement a shorter work week for everyone to avoid the need for layoffs.
• Exit incentives: Offer employees an incentive to leave voluntarily. This can include early retirement packages or severance deals.
• Voluntary sabbatical: A sabbatical is similar to a furlough, only the employee is in control. They decide how long of a “break” they will take from the company and what that looks like. It is unpaid but can give them a chance to further their education or simply reset their priorities.

There are times when even these options are not sufficient to avoid layoffs, but they can reduce the need for them, and sometimes even replace them. It also sends the right message to your staff that you're trying everything possible to avoid a reduction in staff.

Develop and Implement a Layoff Strategy

If you cannot avoid layoffs altogether, it is important to have a strategy. There are a lot of things to consider:

• Will the cuts come in one department, or will they impact everyone?
• What positions (not people) will be eliminated?
• What criteria will you use to make your decisions?
• Will you offer any kind of severance to employees who are let go?

Another critical key is to document the process you develop thoroughly. Make sure that managers and others involved stay as objective as possible. Don’t target people specifically. That can leave your company open to issues like poor reviews on sites like Glassdoor and other employees leaving as well.

It can also leave you open to legal action. You should always consult with your attorneys before beginning any layoff actions to make sure you follow your state and regional laws if applicable.

Communicate Clearly

You must also determine how you will tell your employees about the layoffs. Be sure all managers are on the same page, as we stated above. Meet with employees one on one, and give them advanced notice if you can. This gives them time to update their resumes and begin their search for other employment.

This also gives them time to complete any projects they might be working on or hand them off to another employee. This ensures a smooth transition for you, your remaining employees, and your customers or clients as well.

The more clearly and empathetically you communicate the reason for and the timing of layoffs, the better the reaction from your staff will be. This includes those who are leaving and those who will remain.

We’ve all read the news stories of poor managers letting a large number of employees go via Zoom. Don’t be the next headline or meme by making and following a clear communication plan.

Reassure Remaining Employees

Finally, when the process is ongoing and complete, reassure your remaining employees about their future with the company. Frame the layoffs as necessary growing pains and explain your plans for avoiding them going forward and do it in an all-team meeting so things are as transparent as possible.

Be sure to offer one on one meetings with managers in addition to group chat. Give employees a chance to ask questions and get the answers they need. You don’t want key employees to exit due to uncertainty.

Evaluate your Workforce and Company Structure Often

There are several keys to minimizing future layoffs. The first is to look at your hiring process and constantly evaluate your current staff. Is there someone who can fulfill this new role, or can more than one role be combined into a new position? Hiring from within is often where the best candidates can be found.

Second, look at your company structure. Are there places where positions could be combined or eliminated? When an employee resigns is a great time to evaluate their department. Before you bring in an additional employee, make sure you truly need them.

No one can anticipate every circumstance that might lead to layoffs, and unfortunately, there is no way to prevent them entirely. But by having a strategy in place, evaluating your other options, and communicating clearly, you can make the process less painful for everyone, and ensure a smooth transition and future for your company.

‍