September 20, 2023

A damaged reputation: How layoffs affect your employer brand

After mass layoffs, we all log onto social media and see dozens of posts from employees who’ve been unexpectedly let go. Some people are saddened by the news but understand and respect this business decision. Others may feel blindsided and hurt by how the company let people go.

Every company has to approach layoffs differently. There are legal challenges to consider, such as benefits, severance packages, and federal laws that may protect certain employees from layoffs. Then there’s payroll, budget cuts, and revenue forecasting.

What happens behind the scenes is overwhelming, but it greatly impacts your employees’ perception and the public’s perception of your company. This affects your employer brand.

Your employer brand is your reputation as a workplace. The employee experience, company culture, employee demographics, and talent development initiatives tell future employees that your company is a great or not-so-great place to work.

How you go about layoffs has a significant impact on your company’s reputation and employer brand. People remember how you treat employees, especially during hard times. This will affect your recruiting and retention efforts later on.

So how do you balance the company’s needs and employees’ needs?

Company leaders may not have control over the economic challenges ahead, but they do have control over their workplace culture and how employees are treated when the business has to downsize. To help you navigate these uncomfortable situations, we’ve shared tips on how company leaders can communicate layoffs to employees with respect, transparency, and empathy.

What to do before talking to employees about layoffs.

Once your organization has determined that downsizing is the only solution to business success, it’s time to be strategic about how to relay this news to employees. Here’s what to keep in mind:

  • Get HR involved to create a plan on how to communicate layoffs to all team members and write layoff letters. Get clear on federal and state law requirements to ensure you’re compliant.
  • Make sure everyone is aligned on logistics, such as when employees’ last day will be, when they’ll receive their paycheck, how they will return office equipment, etc.
  • Compile available resources for employees who will be let go in addition to their severance packages and benefits.
  • Identify how you will tell employees about the layoffs. Make sure this conversation is in private and allows for a two-way discussion, whether over the phone, virtually, or in person. Avoid mass emails – they feel cold, out of touch, and make it hard for employees to ask questions.
  • Reflect on your own mental health. Laying off employees is a difficult decision that often comes with guilt and feelings of failure. This may require you to connect with a therapist or counselor to help you process your emotions.

What to do during your conversation with employees.

This dreaded discussion will not be easy, but there is a way to do it respectfully and with transparency. Here’s what to keep in mind during the conversation:

  • Share why and how the company came to this decision. Ensure it is the last option and the only way for the company to succeed during these uncertain times.
  • Provide employees with information on their last day, when they’ll receive their last paycheck, severance packages, benefits, and other resources to help them during this transition out of the company.
  • Give employees an opportunity to express their feelings and ask questions, which may include:
  1. How long have you known about the layoffs?
  2. How did you decide who to let go?
  3. Are there more layoffs coming?

Team members may be hurt, upset, and shocked at this news. They deserve answers, especially when it comes to their livelihood and well-being. Remember to be open to feedback without getting defensive or dismissing their feelings.

What to do after your conversation with employees.

Offer as much assistance as possible. After sending the layoff letter, ensure you’re available to write recommendation letters or be a referral.  

Remember your remaining employees may also be shocked and are feeling uneasy about their job security. Be transparent with them by sharing:

  • Why the layoffs were necessary and how they will positively affect the company.
  • Whether or not more layoffs are coming.
  • How your company is committed to rebuilding its culture so all team members feel a sense of belonging.
  • How employees can reach out if they have any questions or concerns.

Giving employees terribly unexpected news and walking away as if nothing happened is one way to damage your employer brand and company culture. While no one hopes for these challenges, they are an opportunity to be transparent with your team, build trust with high-performing employees, and attract great talent when it’s time to recruit.  

Learn more about building a supportive, engaging, and inclusive company culture.

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