Amazon and Salesforce are among the latest tech companies to announce job cuts, after rapid hiring over the last several years. For every company announcing layoffs, senior leaders and managers must keep the remaining employees motivated and productive.
Among U.S.-based companies, announced layoffs were up 172% in the fourth quarter of 2022 — with more than 154,000 jobs cut, compared to nearly 57,000 in final quarter of 2021, according to the latest report from Challenger, Gray and Christmas.
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“Managers should know what to expect after a layoff,” said Connie Whittaker Dunlop, founder of Monarch Consulting Group, which develops leaders, teams, and organizations through coaching and training. “Layoffs done wrong are going to incur additional costs of hiring and defeat the initial purpose.”
The aftermath of a layoff is significant not only for those who lose their jobs but also those who remain. Companies that go through layoffs are often left with employees who are less trusting, less committed and less satisfied, experts say.
Leading and managing ‘layoff survivors’
About 70% of “layoff survivors” say their motivation at work has declined since the layoff, according to a survey done in late November by BizReport. Additionally, 66% report they feel overworked since the job cuts, and a third of those who survived a layoff believe that things will worsen for their company in the future.
Workers feeling insecure in their jobs and higher levels of stress lead some employees to quit out of frustration. To counter those negative sentiments, experts say leaders need to communicate the organization’s near-term goals and plans very clearly with front-line managers.
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“Leaders have to show how they’re in tune with what’s the most important thing for their teams to accomplish with fewer people,” said Mark Dollins, president of North Star Communications Consulting, a consulting firm focused on talent development.
Having a clear and compelling story about how the layoffs are going to better prepare the company for the future is an important component to managing change.
That means “giving employees confidence that we’re doing this because it’s not just a reactive thing,” Dollins said, “and when we get to the end of this state, as a result of this restructuring or layoffs or whatever we’re calling it, we’re gonna be in a better place.”
Be transparent about ‘quiet hiring’
“Quiet hiring” is when an organization acquires new skills without actually hiring new full-time employees. That may mean current employees temporarily move into new roles.
To avoid the pushback from layoff survivors who already feel overwhelmed, experts say leaders should let workers know what skill sets will be needed and how they can get them and communicate that clearly. Otherwise, they risk a public employee backlash.
“Workers don’t take this out in the breakroom anymore, they take it out on TikTok,” said Sam Caucci, founder and CEO of workforce training platform 1Huddle.
Signal an ‘all-clear’
Layoffs tend to come around the end of the fiscal year, as companies close their books and make adjustments for the future. Of course, economic conditions can always change, but giving employees an ‘all-clear’ signal when the company is done with a round of layoffs can help reset the stage.
“That creates a sense of ‘okay, now let’s get back to work’,” Dollins said.