Company Culture

Reducing the impact of layoffs on company culture

As the pandemic continues to drag on, many companies are facing difficult choices when it comes to their workforces. While some businesses have been able to maintain their pre-pandemic staffing levels, and others are even hiring, many have been forced to make cuts. Whether through furloughing or completely laying workers off, the trauma surrounding these separations for both those leaving and the ones staying can manifest in negative outcomes for your company culture. It’s critical that you put strategies and processes in place to minimize the impact of layoffs and bolster morale in the lead-up to one of these events, as well as in the immediate and sometimes extended aftermath. In this post we’ll outline some ideas for respecting and supporting employees, whether they’re remaining on your payrolls or not.

Prior to the layoffs

While separation decisions are typically made through a confidential process, and for good reason, it’s still possible to be upfront with your employees rather than leaving them wondering. Odds are they’ll know the business is at risk, so keeping them in the dark as to your efforts and intentions only serves to ratchet up the collective anxiety. This anxiety then ripples through meetings, project work, and even casual banter, putting your business in an even worse position as employees are unable to focus on their tasks.

Establish a reputation for transparency and trust by sharing what you can when you can. If your employees know that you’re doing everything you can to prevent furloughs and layoffs, and what the process looks like for deciding, they will feel respected and valued even while they may be concerned for their jobs. Let them know your timeline for deciding, and what would need to happen to prevent a situation where you have to initiate separations. Don’t put them in a position where they’re panicking and trying to ferret out clues. Tell them what’s happening, why, and when so they can start to prepare themselves accordingly. The impact of layoffs can be devastating to single and even dual income households, so having a bit of advance notice that layoffs may be necessary can help families start to plan.

The layoff process

If possible, it’s best to execute the separations all in one go. Otherwise, you leave employees wondering when the other shoe is going to drop. Explain that the senior leadership team is doing everything possible to make this a one-time event, and be respectful in your individual conversations with people. Understand that they’re likely to be upset, and don’t try to make light of the situation. Be honest that this is not something the company is doing by choice, but out of necessity, and let them speak their minds. How their colleagues were treated during the separation process will filter back to the employees who are staying on, as well as to future candidates, so it is in your best interests to be both human and humane in your interactions. Explain to them their benefits, any severance they may receive, as well as their healthcare entitlements. If you can provide additional supports, do so.

After the layoffs

Those employees who remain with the company will likely feel shaken by the loss of their colleagues and the threat of another round of separations. They will need your support to help minimize the impact of the layoffs. Where possible, provide access to mental health professionals to help team members parse through their emotions and fears. Schedule opportunities for employees to voice their concerns and ideas for moving forward to management so they know that they have a say in what happens next. Don’t harp on how much needs to get accomplished in the near-term to save the company; give employees time to deal with their trauma.

Ask managers to check in with their team members individually to see if they need anything. Be thoughtful about reallocating assignments rather than further overloading employees who are already burned out. Treating your employees as human beings rather than ‘human capital’ will go a long way towards helping your company emerge from this crisis without insurmountable culture debt.

Ultimately, there’s really no good way to handle furloughs and layoffs, but there are ways to make it less damaging for your employees. Maintaining a healthy company culture is a critical component to ensuring business success, so while it may be easy to overlook during a crisis when so many things need attention, that decision (or oversight) will come back to bite you down the line. If you’re looking for an automated way to manage and measure company culture in the aftermath of a separation event, Workrowd can help. Give us a shout at and learn more about how we can help you rebuild or bolster your company culture from the bottom up.