Understand Optics and Adjust Strategy Before Announcing Layoffs

pink slip

Despite some positive data about the global economy buzzing around, there continues to be a spate of layoffs across multiple industries. Navigating the optics of delivering bad news and how stakeholders perceive it is critical to protecting reputation. Failure to consider the perceptions of stakeholders can result in significant damage to a reputation that took time and effort to build.

From Amazon to Zillow, the tech sector in particular has experienced layoffs as the economy has rebounded from COVID. Companies that over-hired to serve customers during shutdowns are now downsizing just as dramatically. As expected, we’ve heard more about the downsizings that were poorly communicated than those done well.  There are undoubtedly more layoffs to come in the next several months as the economy chugs along.

I once joined a company that was in the midst of a Chapter 11 reorganization. It had completed a huge layoff of corporate office staff a few months before I started. My first two assignments upon arrival: 1) rebuild employee trust in management, and 2) prepare a communication plan for another mass layoff. The timetable was three weeks. Welcome aboard!

During the first layoff, there was no communication strategy. While impacted employees were literally walking to their car, box in hand, a huge bronze statue was being delivered to the corporate office. The CEO was nowhere to be found. You can imagine how people reacted to the optics of this event. What little trust may have been there evaporated in that moment.

Leaders will be well served to take the time to understand what is happening inside the company and the broader business environment in developing a communication plan. Here are some recommendations:

Tip #1: If downsizing is unavoidable, move quickly to open lines of communication with employees and candidly discuss the realities of the situation. Employees can handle bad news; they cannot handle an information vacuum from management.

Tip #2: Before axing the headcount, explore alternatives to share the pain. You might be surprised by how much employees are willing to do to help solve a crisis if they believe that leaders are sharing equitably in the sacrifices.

Tip #3: Make sure employees hear it from management first. Treat everyone with the same level of dignity and respect. Make sure that both actions and messages align with company values.

Tip #4: Review all scheduled communications, especially marketing campaigns. It is disingenuous to all stakeholders, and employees in particular, to paint a rosy picture in ad campaigns while people are being fast-walked to the door. Pause those campaigns that might be perceived as mixed messages.

Effective communications in a tough situation are as much about doing the right things as they are in saying the right things. Empathy and compassion are paramount. Treat people like adults, be candid but not morose, and ask everyone to contribute to finding solutions. Doing so can deliver the needed savings and help protect reputation even in difficult times.

Deb Hileman, SCMP, is president and CEO, Institute for Crisis Management