How to Lay People Off with Humanity

As we transition from “The Great Resignation” of 2022 to what might be called “The Great Layoff” of 2024, many companies are grappling with the challenge of reducing their workforce. While no layoff process can fully eliminate the associated pain, there are strategies to handle it with greater compassion and respect.

Take Airbnb’s approach in 2020, for instance. Faced with the pandemic’s impact on the travel industry, CEO Brian Chesky sent a widely praised email to affected employees, demonstrating empathy and transparency.

In contrast, three years later, Google’s methods of notifying employees about their layoffs—through mass emails and even sudden loss of access to work accounts—left many feeling intensely disconnected. One of those employees was Vivek Gulati, with whom I collaborated on an essay about the experience.

A few minutes after learning that he had been laid off, “I texted my former manager,” Gulati wrote. “I had asked him to be my reference for an internal job transfer just the previous week. Fifteen minutes later, he texted back saying he had been laid off too. He had tried to enter an office building, and his badge didn’t work. It was a rough way to find out.”

A tech-industry veteran, Gulati had been laid off multiple times, and knew it was possible for the process to be less disorienting. For example, he recalled a previous experience where a VP personally communicated the layoff, explained the decision, and offered a recommendation, highlighting the importance of a personal touch.

These details matter. Research from Culture Amp, which assesses employee experience, reveals several misconceptions about layoffs:

• “Strong company cultures handle layoffs better.” False. Companies with the most committed employees before the layoff often see the steepest declines in engagement, likely due to heightened feelings of betrayal.
• “Employee morale rebounds after a layoff.” False. Employees present during the layoff often show lower pride and commitment even after two years.
• “Layoffs are necessary for long-term profitability.” This is true only when correcting excessive employee capacity, as with Airbnb. Data suggests that layoffs can lead to underperformance for up to three years and damage company culture.

The Impact of Layoffs

Layoffs can profoundly affect an organization. They often lead to diminished trust and loyalty among both employees and customers. The loss of established personal relationships and team cohesion disrupts workflows and can make the organization more rigid, stifling innovation. Additionally, the departure of experienced staff results in a loss of valuable knowledge, which impairs the organization’s ability to handle unexpected challenges. This disruption can lead to decreased productivity and a weakened organizational culture, further compounding the negative effects.

Remaining employees might struggle with increased workloads and reduced morale, potentially leading to internal conflicts and resistance to change. The overall costs of managing layoffs can sometimes outweigh the financial benefits, and the resulting instability may discourage risk-taking and innovation—the exact skills needed for the organization to thrive.

Strategies for Humane Layoffs

To approach layoffs with greater humanity, consider the following strategies based on research by University of Michigan’s Kim Cameron and others:

• Make a personal connection. Ensure that the news is delivered by someone who has an existing relationship with the employee. This could be a direct manager or a senior executive who can provide context, acknowledge the employee’s contributions, and offer support where possible, such as referrals.
• Create support systems. Implement robust support mechanisms, including prompt and fair severance pay, access to internal job listings, and external outplacement services. For employees on work visas, offer clear guidance on their options and legal requirements.
• Take a broad view. Provide thoughtful support to both departing and remaining employees. Departing staff should receive comprehensive severance packages and career counseling. Meanwhile, remaining employees need reassurance, open communication about the reasons behind the layoffs, and resources to help them cope with the transition.
• Prepare for transition. Offer adequate notice before layoffs occur, extend health benefits, provide financial planning assistance, and facilitate access to counseling and retraining opportunities. Cross-training employees can also prepare them for new roles or responsibilities.

Key Principles for Compassionate Layoffs

Handling layoffs with compassion involves maintaining honesty and transparency. Clearly explain the reasons behind the decision to minimize rumors and sustain trust. Whenever possible, deliver the news in person or via video call rather than through impersonal channels. Allow employees time to transition gracefully, offering them the opportunity to wrap up their work and make farewells.

Providing long-term support, such as generous severance packages and continued health insurance, can ease the transition for employees and their families, preserving your company’s reputation. For those remaining, reinforce a positive and motivating message, address any shifts in company strategy, and ensure they feel valued and secure.

Acknowledging the emotional impact of layoffs and offering tools like career coaching and job placement services demonstrates ongoing support and commitment. This approach helps employees see their value and prepares them for future opportunities, fostering a positive outcome even in challenging circumstances.

By treating employees with respect and providing comprehensive support, companies not only mitigate the negative effects of layoffs but also reinforce their reputation as considerate and responsible employers.