Managing Layoffs Better

January 24, 2019

Sometimes, for your company to survive you need to make tough decisions, and layoffs are one of the most difficult decisions that a boss can make.

Hopefully you’ve considered all of the alternatives: Freezing hiring and promotions, stopping pay raises, or just asking some employees to reduce their hours.  Retraining some employees to take on different roles might also help you.

If you’ve reached this article though, you probably are already at the point where you know that layoffs have to happen.

So here are the steps that you should take once that decisions is made:

  • Plan for the future.  Look at what is working for your company and focus on the departments and positions that are making things work. Be sure that you’re focusing on the bottom level workers who actually make your company work and not on the managers that you might know better. Even if that manager is your friend, if they’re only managing one employee that probably isn’t an essential position.
  • Check your work.  You might need someone you trust to take a second glance, but make sure that the cuts that you’re making are reasonable and without bias. Even the best person can make unconsciously bad decisions, and if your company is 40% female but the layoffs are 75% women, that might indicate an issue to be addressed.
  • Write a policy.  Write out the policy for conducting layoffs. Hopefully these will be in place before you need them, but even if you’re just getting to them now write them out in a neutral, systematic way so that you can treat every employee fairly during layoffs and with proper diligence on contracts and employee rights.
  • Communicate with a plan.  Part of your policy needs to involve the communication with your staff. Hopefully you’re already communicating the realities of business to your workers, but make sure that people understand what you see in the market when especially during layoffs. Communication also needs to be regular (don’t go a week without communication), prompt, and direct. Don’t force employees to have to hear about things from each other, make sure that everyone is on the same page.
  • Don’t stretch it out.  Once the decisions have been made, checked, and preparations are made, do it.  A trickle is demoralizing, and stressed employees are prone to making mistakes.  Treat it like a Band-Aid. 

Although this might not warrant a bullet point, remember that change is emotionally fraught for everyone.  Don’t hide, don’t yell, and don’t expect people not to cry.  Prepare yourself for it mentally ahead of time and after the fact.  It’s going to be stressful for both you and the employees.

Remember that with the proper planning, going through a round of layoffs will make your company more successful, and will be better for everyone.