Having to let people go is a painful thing to do at the best of times. There is no good way to tell someone they no longer have a job. And during a global crisis, when the world is full of uncertainty, the stakes are higher than ever.
COVID-19 is already hitting businesses hard. The first waves of layoffs are here and unemployment is rising in hard-hit areas and industries. In mid-March, 3.3 million Americans filed for unemployment in just one week, the biggest spike on record. … Until 6.6 million more filed the following week.
There’s arguably no worse time to lay people off, but for many businesses, it’s become an inevitability. Teams are distributed, people are in lockdown, emotions are running high, and big decisions need to be made quickly.
From deciding if layoffs are your business’s only option to letting people go in the most humane possible way, here’s your guide to handling layoffs during COVID-19.
Make sure layoffs are a last resort
Your people are your company’s biggest asset. In many ways, your people are your company. In the words of one HR professional at a US company affected by COVID-19, “companies will recover just fine if they take care of their employees today.”
A startup founder we spoke to agrees and explains why their company opted not to lay people off in response to COVID-19. “We are currently in an extraordinary situation,” says the founder. “The world is basically put on hold. We have worked hard to build this team, and we wanted to find a way to cut costs without leaving our employees alone in an uncertain world and having to hire the same people when the crisis is over.”
Review all other options to see if any combination of temporarily lowering salaries, cutting benefits, reducing work hours, government support programs (such as the Estonian government’s temporary subsidy program for impacted employers), or unpaid leave could be financially viable as an alternative to layoffs.
Keeping lines of communication open with your teams at this time is crucial and may yield unexpected results. When teams come together in difficult times, crowdsourcing solutions can result in creative ways of cutting costs and/or increasing revenue.
What’s more, when you make your team feel included, trusted, and heard, you’re boosting your chances of getting buy-in from them for any projects or initiatives you end up going with. Open communication is particularly important for remote teams, where fear and uncertainty are easily amplified by isolation and suspicious silences from management.
This decision is, of course, infinitely bigger than an article that says “try not to do it”. COVID-19 is affecting different regions and industries at varying levels of severity and there is no blanket solution for everyone.
Ultimately, not everyone will be able to avoid layoffs. If you find yourself in this situation, don’t panic, and get prepared.
Why approaching layoffs carefully is crucial
Whatever your exact circumstances, one thing is certain: layoffs should be managed in a way that leaves people with their dignity, humanity, and as much support as you can give them.
A lot hinges on the way you approach these cutbacks:
The wellbeing of laid-off workers
First and foremost, being laid off can take a significant toll on people emotionally, psychologically, financially, and physically. Potential emotional reactions to losing a job include (source: Stanford University)
- Loss of enjoyment or appreciation
- Feelings of worthlessness
- Loss of self esteem
In addition to these obvious and immediate symptoms, a 2015 study found that going through a layoff can cause lasting trust issues in an individual.
The consequences of job loss aren’t limited to emotional distress. Physical symptoms like weight loss or gain, sleep disturbance, fatigue, and a weakened immune system are also common, the Guardian reports. During times of a global crisis and precarious economic conditions, these effects can worsen. And as businesses around the world are closing, implementing hiring freezes, or cutting workers’ hours, finding new employment opportunities and income sources is likely to be significantly more difficult than normally.
All of this can leave your laid-off workers in a psychologically and financially vulnerable position.
Your employer brand and reputation
Your own reputation shouldn’t be your top concern in this situation, but it’s worth keeping it in mind as a reality check. An indifferent and insensitive approach to layoffs can come back to haunt you even much later. How you treat your employees now will shape your (employer) brand. Based on public reactions to COVID-19, it’s entirely conceivable that future jobseekers will ask about your response to the crisis and use your answer to determine whether they want to work for you.
On the internet—which is where we all live now—there’s nowhere to hide from a hit to your reputation. According to one study, around 38 percent of laid-off and terminated employees post negative employer reviews on sites like Glassdoor. Another found that “83 percent of job seekers are likely to base their decision on where to apply on company reviews, and 46 percent will weigh a company’s reputation heavily before accepting a job offer.”
Employee morale and survivor’s guilt
Layoffs don’t affect only the people you let go. Will your remaining employees be grateful to still have a job amid a global crisis? Don’t count on it, and don’t expect it to raise productivity. Remaining team members can suffer from a noticeable lapse in motivation and morale. According to one study, 74 percent of employees who kept their job in a layoff reported decreased productivity later. Layoffs also cause survivor’s guilt in those who stay, and can even make them more likely to quit voluntarily.
And this is under “normal” circumstances. Today, the global baseline for stress and anxiety has changed drastically. Social science experts believe that most people are unprepared to cope with the disruption caused by COVID-19, with some experiencing “symptoms severe enough to warrant seeking professional help.”
So although layoff survivors may rationally acknowledge that they’re fortunate to be employed at a time like this, they’re still likely to experience strong negative emotions associated with seeing colleagues getting laid off, in addition to an overall increase in stress, anxiety, and disruption caused by COVID-19.
How to lay off remote employees with humanity and compassion
If laying off staff is the only viable option available to you, now is the time to bring all your emotional intelligence to the table.
“Layoffs can be one of the most stressful actions a leader or business owner has to take in their career,” says Silja Voolma, Ph.D., applied behavioral scientist and CEO of Behavioral Design Global. “Especially if they are going through it for the first time. The same goes for the employees. Albeit at the potential cost of short-term fear and uncertainty, layoffs can be managed in a way that supports employee mental health in the long term.”
Here’s how to cause the smallest possible amount of damage to your team and yourself when laying off employees.
How to prepare for a layoff
Invest in self-care first
“To maintain empathy, compassion, and commitment to the success of the employees you’re laying off, you need a reserve of extra energy,” says Dr. Voolma. But while people everywhere are experiencing unprecedented amounts of stress at work and in personal life, this is a tall order.
The best first step employers can take before starting to lay people off is to invest time in their own mental and emotional health. To manage the stress, Dr. Voolma recommends starting with something as simple as a spa day at home before conducting layoffs. To make sure you’re doing everything you can to protect your own mental health in the situation, consider getting professional help. You can’t be there for your team if you’re not there for yourself.
Don’t hide behind COVID-19
Conventional wisdom dictates that the only acceptable way to lay someone off is face to face. For teams woking remotely during COVID-19, this is no longer an option. But don’t let this tempt you into laying people off via email, pre-recorded message, or even a group call. An individual video call with each affected employee is the most respectful thing to do under the circumstances.
“Laying off people doesn’t just suck, it sucks big time,” one startup founder sums up the problem succinctly. “I think the secret is being there to pass the message. I have made mistakes there, but honestly, I think this where the CEO needs to have that conversation. At least in an organization with less than a hundred people.”
But whether it’s the CEO or each person’s direct manager who breaks the news, it should come from a real person, in real time, and as close to a face-to-face meeting as possible.
How to conduct a layoff video call with compassion
- Schedule the call for the same day you send the invite. This avoids the employee having to dread a mysterious meeting, the purpose of which they can probably guess from context. If your remote employee is in a different time zone, go by their calendar to schedule the call at a reasonable hour for them.
- Stick to a script. If you have no experience with layoffs, your first line of defense might be to hide your discomfort behind vague language. Prepare a script for the conversation to stop yourself from getting sidetracked or flustered.
- Practice beforehand. Run through your lines so you don’t come across as robotic and insensitive when delivering your scripted message. It’s never going to be a good conversation, but it should still feel like a real conversation.
- Get your tech in order. Like with any other video call, make sure everything is working properly. If the call drops unexpectedly, it will add an extra stressor to an already tense situation. Check your mic and speaker. Make sure your internet connection is solid enough to handle a video call without disruptions. Close any apps you don’t need.
- Maximize privacy. Don’t have any family members in the room with you as you make the call. In a regular remote meeting, people are getting used to seeing children and spouses milling around in the background, but try to avoid it in this case, if at all possible. Ask the employee to do the same.
- Take an encouraging and supportive tone. According to Dr. Voolma, it’s important to both acknowledge the difficulty of the situation and take an encouraging tone when you reveal the news to your employees, helping them frame the event as at least a neutral emotional experience, even if it can’t be positive. “This will give your employees the resilience and positive attitude they need to go into their job search successfully,” says Dr. Voolma. Be encouraging without being condescending:
- Avoid words that minimize the situation (such as “just” or “actually”);
- Don’t tell them how to feel (“you’re probably upset”);
- Show how you plan to support them throughout the transition.
- Speak slowly and calmly. In a video call, words can easily be swallowed by a glitch in the internet connection, a careless hand on a microphone, or any number of other mishaps. Keep your words clear and your tone calm to minimize misunderstandings.
- Make your reasoning clear and fact-based. Clearly and unambiguously explain:
- Some positions at the company have been eliminated (avoid words like “restructuring” that could be misinterpreted) due to the effects of the COVID-19 pandemic;
- The employee’s position is one of those affected and they are being laid off;
- The reasons why, point by point;
- This decision is final.
- Ask if they understand everything you said. Offer to repeat or clarify yourself, especially if the call quality gets spotty at any point.
- Do not make any promises you can’t keep. Offer all the help you can, but make sure you have the time and resources to deliver on what you promise, to avoid further disappointment down the road.
- Don’t make it about you. You’re probably (rightfully) upset about having to let go employees you respect as people and professionals. But your laid-off employees don’t want to hear about how difficult it is for you. You can make a point of mentioning that the decision was difficult, but don’t go on about it or ask for their sympathy. This is not the time for that.
- Be very clear about how the transition will happen. Your laid-off employees should never be in the dark about what to expect and when.
- Give them the opportunity to respond. Listen patiently. Don’t argue, but offer clear and calm explanations. If they get emotional or heated, offer to meet with them again at a later time to go over any remaining questions or concerns.
- Have a plan for how they should return their equipment. Don’t belabor the point. Getting your company laptop or phone back shouldn’t be your top priority right now. Be flexible about deadlines for this. If they currently don’t have a personal phone or laptop, for example, let them hold on to your devices while they search for a new job.
- End the call with clear next steps. Tell them who will be in touch and when. Give them an easy way to contact you or someone else on the team who will support them throughout the process.
How to manage the aftermath of a layoff
Offer resources and letters of recommendation
Employees laid off during COVID-19 will be entering a drastically different job market. Offer any resources you have access to: employment counseling, job training, introductions. “Employees getting laid off need your practical help more than anything to keep up their mood and hope in finding a new job,” says Dr. Voolma. “Make sure you send your employees off with great recommendation letters so they feel empowered about their skills and future opportunities.”
Don’t leave laid-off international employees to their own devices
Expats who lose their jobs amid the COVID-19 crisis might find themselves in immigration limbo with a number of potential issues, such as being in danger of losing their right to remain in your country. Give them whatever support you can, or work with an immigration partner like Jobbatical to ease their transition at this difficult time.
Don’t cut contact
Once layoffs have happened, Dr. Voolma advises against closing your doors to the people laid off. “Invite past employees to company events, virtual happy hours or even video workouts,” she recommends. “This again will help those in transition to feel less stress and be less vulnerable to more serious mental health concerns like depression as they will maintain some of the social connections so important to our wellbeing.”
If you don’t feel comfortable staying in such close contact with former employees—or if you think they would feel awkward about it—still consider following up with them regularly. “They will appreciate the feeling of familiarity of speaking with old colleagues while they are in the transition phase of finding new ones,” Dr. Voolma says.
Open up your network
With a global crisis and an economic recession looming, Dr. Voolma believes it is vital you invest time into introducing laid-off employees to people in your network who might be in a position to hire them. “You are much closer to hiring decisions than many of your employees are,” says Dr. Voolma. “Whilst you cannot take responsibility for anyone’s outcomes, you should extend a helping hand in making connections between the employees you are laying off and people in your network who might be able to help.”
How to manage the mental health and wellbeing of remaining employees post-layoff
Once you've done everything you can for those directly affected by the layoff, it’s time to be there for your remaining team. Squash any potential rumors by making an announcement early, with as much transparency and honesty as you can muster.
We already established that your remaining employees will almost certainly feel a range of conflicting emotions. Relief, guilt, sadness, fear of being next—whatever they’re feeling, there’s probably a lot of it.
Don’t shrug it off, and don’t manufacture forced cheer and misplaced optimism. People can see through attempts to gloss over issues, and you won’t build trust or confidence by acting like nothing has changed.
“One of the most damaging influences layoffs can have in a company is that of silencing the people who remain behind,” says Dr. Voolma. “It is important for employers to encourage discussion around layoffs and any fears or feelings of guilt the employees who remain might have. This will help lessen the feelings of anxiety and uncertainty about what is happening in the company and what caused some employees to be laid off versus others who stayed.”
Be transparent about the future of the company
Transparency has never been more important for business leaders. The question on your remaining employees’ minds is: who’s next? Be proactive about giving honest and regular updates about the future of the company. Do this weekly or more often if the company is in danger of closing altogether. “The best thing you can do for your remaining employees is give them ample notice about possible further layoffs so they can have as long as possible to find new opportunities,” says Dr. Voolma.
Have 1:1 meetings with each remaining employee
“During layoffs, employees want personal reassurance,” Dr. Voolma says. “This is what helps them manage stress and anxiety around their own jobs and maintain a reasonable level of productivity.” Make yourself available and approachable for anyone who has questions or concerns: a Leadership IQ study showed that “every extra hour a leader spends with their people increases engagement, inspiration, and innovation.” If your team size allows for it, make sure every employee gets to speak to the CEO in person and has the opportunity to voice their concerns.
This is a crucial time for your company. You may be busier and more stressed than ever, but make time to be there for your team and for yourself. To keep your team functioning as well as possible under the circumstances, read our guide on How to Support Your Remote Teams Throughout the COVID-19 Crisis.