The Right and Wrong Way to Announce Company Layoffs

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the do's and don'ts of company layoffs

There’s no way to get around it: layoffs suck. With big names like Meta, Stripe, Twitter, and Salesforce recently announcing layoffs, it’s clear that there is a right way to go about bearing bad news and…a very wrong way. 

Layoffs are expected to continue into 2023, and job cuts may exceed that of the Great Recession. In fact, 61% of business leaders expect their companies to have layoffs in 2023, and of those, 57% estimate that 30% or more of the workforce will be laid off. How those companies communicate these expected layoffs to their employees is crucial to their reputation, employee motivation and retention, and, ultimately, the trust they have built both internally and with the public. 

Here’s our list of dos and don’ts to help guide companies that find themselves in the unfortunate place of enacting layoffs. 

Do: Be genuine and empathetic. 

Your employees just received shocking news. Even if they aren’t being laid off, a colleague of theirs is. Layoffs affect everyone in your company in some way, shape, or form, so it’s important to be empathetic to the rollercoaster of emotions they are feeling. The last thing you want as a brand is to add salt to a—very fresh—wound by being insensitive. Twitter’s recent email announcing layoffs offered no apology or clarity to employees or the public. It was policy-focused, nameless and, honestly, really confusing. 

There is no easy way to notify employees that they will be laid off, but if you commit to communicating in a genuine, transparent, and empathetic way, the process can feel smoother for everyone involved. 

Don’t: Sugarcoat or speak in “fluff.”

In journalism-speak, “don’t bury the lede” and “stick to the facts.” Trying to put a spin on layoff news will leave your employees frustrated and confused about what is really happening. While it may be tempting to put a positive spin on the news, the employees you’ve just laid off (and the colleagues they are leaving behind) want to know what next steps they should take. When are their last scheduled days? How are loose ends and paperwork to be tied up? How will the remaining employees operate with reduced staff members? 

Be honest and direct with your plans and expectations. Remember your employees have been loyal to your company, they deserve transparency and respect. Explain severance packages and give any pertinent details your employees will need to transition out of their roles. 

Do: Take accountability.

As soon as employees hear the word “layoff,” the rumor mill starts spinning. Get ahead of the hearsay. Address why the layoffs are happening and own the narrative—it’s your company, your situation, and your story, so be accountable for it. In Mark Zuckerburg’s message to Meta’s employees, he announced a layoff of 11,000 employees—13% of the company—and a continuation of the hiring freeze through Q1. However, he also addressed the “How did we get here?” question immediately. He owned the story. 

Taking accountability can look like a variety of things. It can (and should) include being honest about why layoffs had to happen and what the decision-making process was like leading to the announcement. But accountability can also mean going to extra mile for your laid-off employees. Companies can include a resume review or a direct contact remaining at the company to act as a reference for future job applications for those leaving. Being accountable for helping your laid-off employees get back on their feet to the best of your ability will go a long way for the internal and external perception of your brand. And if you hope to rehire any of the people you’ve laid off, they will be much more interested in returning to a company that did its best to mitigate a bad situation rather than one that left them out in the cold. 

Don’t: Be vague.

Your employees need specifics. They need the full truth of what has happened, and what that means for them, so they can prepare properly. That’s why AirBnB’s widely praised memo to employees played so well internally and with the public. The CEO and cofounder Brian Chesky was announcing the layoffs of about a quarter of its workforce. But by transparently describing the challenges the company faced, the solutions the leaders considered, and how they arrived at their decision, they were able to reinforce the trust employees had in the company. It’s easy to trust someone who always tells you the truth. 

Do: Give context and a future-forward outlook.

If layoffs aren’t part of a long-term plan for your company, you shouldn’t be making them. If remaining employees see layoffs as a short-term budget solution, they’ll be unmotivated and simply waiting to be cut loose next. If employees think the company is tanking financially, they may begin their job search early. But if leaders can reaffirm the company’s values and plans for the future—the opportunities the company and its employees and stakeholders can look forward to—there can be a silver lining. What is the strategic gain for the company to move forward in its mission that necessitates the layoffs? 

Stripe answered that question and more with a detailed look at how they were handling the departure of 14% of its employees. In CEO Patrick Collison’s memo to staff, later posted on Stripe’s website, he talked about “the world around us,” giving context from the outset of the pandemic in 2020 through today. They were honest about having grown operating costs too quickly and set forth a plan for the future. 

Don’t: Make promises you can’t keep.

When layoffs happen, a lot of questions are raised simultaneously. Often leaders don’t have all the answers readily available, but the worst thing they can do is commit to something they can’t reasonably fulfill. When pummeled with questions, the best thing leaders can do is to assure employees they will get the answers they need—and then go actually find the answers if they don’t already know them. If, instead, leaders give placating answers to their teams, the company will have agitated newly laid-off employees at best. At worst, the company could face legal action. 

For these reasons, it’s important to include HR in every step of the layoff process. Leaders should hold exit interviews to speak with each employee individually. And provide avenues for additional feedback from those employees who are staying with the company. 

Although layoffs are difficult and sometimes awkward to contend with, it’s imperative that leaders be able to communicate and understand why and how decisions were made with their employees. If your company is considering a layoff period, proactive planning and communication must begin now. And if you need help building your communication plan around upcoming layoffs, reach out. Good communication is kind of our thing. 

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