How to make redundancies without crushing employee morale

Don't let a round of layoffs ruin your company culture.

by Jack Torrance
Last Updated: 19 Jan 2017

Redundancies are an unfortunate fact of life. Markets change, businesses go through rough patches, debts get called in and sometimes the weight of this has to fall on the workforce. In this age of economic upheaval and digital transformation it seems unlikely that’s going to stop being the case anytime soon.

But telling somebody they’re out of a job isn’t getting any easier. It’s an emotional challenge and needs to be done sensitively. And it can also have an impact on the wider workforce, especially when several workers are being let go. With that in mind here are some steps you can take to stop a round of redundancies turning into a toxic sense of doom and gloom.

Tear off the plaster in one go

A slow trickle of departures is sure to breed ill feeling as every worker begins to wonder if they’ll be next for the boot. Where possible it’s best to announce lots of job cuts on the same day, rather than staggering them over a longer period. That way everyone can get back to business instead of agonising over the future.

Be as clear as possible

This is no time for vagueness. Employees need to know exactly what they can expect and when. If you’ve already determined exactly who will be leaving inform them right away. If not then you should outline the process by which that will be determined. And don’t mince your words. Niceties like ‘letting people go’ are fine; saying you’re ‘streamlining the workforce’ or ‘right-sizing the company’ is not.

You also need to spell out why exactly you need to make the layoffs. ‘It's best to be clear about the business rationale for the redundancies and the steps to be followed by the business in achieving the outcomes it is looking for,’ says Jonathan Maude, an employment lawyer at Vedder Price. ‘The aim is to avoid the kind of toxic corridor chats that may otherwise occur and damage the remaining employees’ attitude towards the business.’

You might want to tell those who are leaving the bad news first, but don’t neglect to tell the rest of your employees altogether. Otherwise they’ll just find out through hearsay. If you’re not open, those who remain are less likely to trust you.

Reassure those who are staying – but don’t rub leavers’ noses in it

Clearly those who are being made redundant need support, but those who aren’t also need to feel like their own jobs are safe and that the company isn’t heading south. You need to show that you have a positive plan for the future and explain how they will have a part in delivering it.

It might be worth holding off on the positives for a day or two though - ‘While business has to continue, don't highlight awards, successes, promotions, good news etc at the same time as delivering redundancy messages to others – it’s rubbing in what they may be losing,’ says Cathryn Foreman, HR consultant at Capital Law.

Don’t close yourself off

Those staying are likely to have lots of questions. Is my job going too? Will we have to reorganise the team? What happens now? Don’t hide away in your office or take a strategic holiday. ‘Senior managers should be visible and available, it’s important to keep the channels of communication open,’ says Homa Wilson, senior associate at law firm Hodge Jones & Allen. ‘Staff should feel they can approach management with their concerns. Lack of visibility following such an announcement is likely to cause further uncertainty and have a damaging impact on morale.’

Get your story straight

If you’re a 20 person office supplies merchant then a few redundancies are unlikely to make it into the press. But if you’re a start-up that’s been courting the limelight or a key employer in your local area then your bad news could soon become the talk of the town. It’s better if staff hear it from you than the local rag.

‘Be on top of what’s in the public domain and be prepared to address any objectionable statements in the media,’ says Wilson. ‘If staff are not kept informed by the business they are more likely to get their information from external sources, such as message forums and social media. External sources may not always be accurate.’

In these days of social media it’s also worth making sure leavers don’t have access to your Twitter account, as HMV so memorably found out...

Read more: How to sack an employee without ruining their life


Find this article useful?

Get more great articles like this in your inbox every lunchtime