Layoffs can be destabilizing to company culture. Leaders have to make painful decisions about which staff to let go in order to keep the company competitive (or even afloat) during change. But if cuts are implemented incorrectly, they can cripple trust between management and employees, with staff wondering if they’re next or whether the company they work so hard for even cares about their well-being.
A recent study by ResumeTemplates.com of 1,000 U.S.-based managers found that 45% of companies are likely to lay off employees in 2025. These businesses cited economic difficulties, industry-specific challenges and AI/automation developments as major drivers behind their decision. The Future of Jobs Report from the World Economic Forum found that 41% of employers see layoffs in the future due to “skills obsolescence,” as well.
Though layoffs appear to be coming for many companies, they don’t need to be an event that puts a business’ ethos in jeopardy. To avoid destabilizing—and demoralizing—your workforce, implement with intent.
Communicate at every stage
Kyle Elliott, Ed.D., M.P.A., C.H.E.S., a career coach in the tech space and mental health expert, says that transparency and honesty should be at the forefront for managers—before, during and after layoffs. “As a manager, one of the most important things you can do during layoffs is to remain transparent and honest,” says Elliott. “Trust is easy to destroy but incredibly difficult to rebuild.”
He suggests that managers who are doing the layoffs be clear on the message the executive(s) want to share before the conversation even starts. “You don’t want to have mixed communication…. So [get] clear about what is the communication that we’re all going to be sharing internally and then usually externally,” he says. He also suggests managers reach out to peers who are also conducting layoffs and be clear on talking points—or even just open up about the difficulties they’re facing personally.
Elliott adds that managers should have an awareness of how communication between the managerial/executive level and staff will appear. If one-on-one meetings or town halls are never called unless negative news is coming, calling them can create a culture of fearful communication, which will only be exacerbated when layoffs are announced.
Instead, Elliott recommends making transparent communication of both wins and losses a regular occurrence. “I think it’s laying that groundwork where there’s that stronger culture,” he says. “You have that safety net where… you’ve kind of poured into employees and where you’ve built that trust with them—you’ve built those relationships.”
Respect your people
Leslie Hansen, founder of the corporate consulting company Leslie Hansen & Associates, understands the nuances of laying off employees while keeping company culture intact. As a VP of operations for a manufacturing company in 2007—the beginning of the Great Recession—she was tasked with laying off over 120 employees who, then, had to train their replacements due to a factory moving offshore.
Hansen created a plan that didn’t erode employee respect by finding out their need… (truncated)
