How to manage (remote) layoffs humanely

Having to let people go is a painful thing to do at the best of times—there really is no good way to tell someone they no longer have a job. 

From deciding if layoffs are your only option to letting people go in the most humane possible way, we consulted experts and founders to put together a guide to handling layoffs humanely, with an emphasis on remote teams.

If your business finds itself faced with the prospect of cutting back, read on for advice on navigating this complex situation.

Consider all other alternatives

In the very unlikely case that this didn’t occur to you: before laying people off, make sure it’s the right decision.

Review all other options to see if any combination of temporarily lowering salaries, cutting benefits, reducing work hours, government support programs, 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”. There is no blanket solution.

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)

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. In global crises and precarious economic conditions, these effects can worsen. 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 influence your (employer) brand. 

On the internet, 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? 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.

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.

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.

Practical considerations before announcing layoffs

There are, of course, many practical and logistical issues to figure out: Will the employees leave immediately or continue to work through a notice period? How will you handle the leaving employees’ workload—will it be distributed among other employees, or will some services be cut?

Consider the upsides of giving employees a notice period: This gives people time to look for another job or be on the right time to register for unemployment insurance, depending on your country’s policies. In Germany, for example, a person has to register within 3 days of receiving a contract termination notice, or face a penalty when receiving their first benefit payment. In Spain, a company usually has 30 days to communicate the layoff to the immigration office.

In Estonia, laid-off employees have 90 days to find a new role, and the same goes for employees in the US on an H1B1 visa.

 In such cases, letting people know in advance will give people more of a chance to find another job and, if applicable, apply for unemployment benefits.

How to mentally prepare for a layoff

Start from self-care 

“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, 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 the screen

Conventional wisdom dictates that the only acceptable way to lay someone off is face to face. For teams working remotely, this isn’t always 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 conversation 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 on the message. I have made mistakes there, but honestly, I think this is 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

How to manage the aftermath of a layoff

Offer resources and letters of recommendation

It’s a tough job market out there. 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 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. Be sure to comply with requirements from your country’s immigration authorities: are you required to notify the authorities about laying off your international workers? If so, when and how should you do it?

Give your expats whatever support you can, and/or work with a partner like Jobbatical to ease their transition.

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 believe this would cause tension or awkwardness, still consider following up with your former employees 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 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 support the mental health and wellbeing of remaining employees post-layoff

Once you've done everything you can for those directly affected by the layoffs, 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.

Encourage conversation

“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 remaining employees

“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 company 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. 

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