After a slew of poorly timed layoffs by Utah companies in December 2023, more executives, companies and employees are talking about the realities of layoffs and best practices. In 2023, over 100,000 U.S.-based tech workers were let go. A Harvard Business Review article writes, “Today layoffs have become a default response to an uncertain future marked by rapid advances in technology, tumultuous markets, and intense competition.” 

Navigating the layoff process is stressful for all involved. While the process will never be enjoyable, there are a few guiding principles that executives can follow to handle layoffs when they must occur. 

1. Be transparent and respectful. It’s easy enough to say, but having honest conversations with employees about the state of the company and the security of their jobs can be uncomfortable. Scott Cuthbertson, president and CEO of the Economic Development Corporation of Utah, advises company leadership to “hold regular check-ins about the conditions surrounding a layoff and what’s being done about it. … People understand business can be challenging and they want to know the truth—they don’t want to live with so much uncertainty.”

Transparency also builds trust with remaining employees. Allowing employees to ask questions and being available to answer them goes a long way in sustaining trust and keeping team confidence and cohesion with the remaining staff.

2. Remember your employees are people. At the end of the day, employees are not just numbers on a spreadsheet, they have lives, families, mortgages and other obligations. One study ranked unemployment as the seventh most stress-inducing life experience if the job is lost by the head of the household. Experiencing a layoff can have serious, long-term consequences on not only finances but also on health and well-being. There are also negative consequences for those who remain. A Harvard Business Journal article states, “Employees who survive the layoff may struggle with anxiety, insecurity, low morale, sadness, and survivor guilt, which lead to disengagement and hinder job performance.”

Carefully considering how layoffs affect all company employees can help executives approach the situation with increased sensitivity.

3. Consult your legal and HR team. Lindsay Mattes, founder and CEO of KindHR, has often consulted companies going through layoffs. She’s a firm believer that the HR team should be actively involved in the entire process. “[HR teams] are, by nature, better prepared to share harder information than some of the managers or executives,” she says. “They’re the ones with the data and the know-how to [give laid-off employees] the support systems they’ll need outside of the company.”

Legal teams should also evaluate layoffs, ensuring that the process and outcomes are fair and unbiased.

4. Provide an offboarding program. Giving laid-off employees a soft landing will go a long way in preserving trust and reputation. Offboarding programs can include holding exit interviews, providing COBRA and benefits information, and even referring employees to useful resources as they begin their job search. Investing time and resources to provide laid-off employees with the tools they’ll need as they process the layoff and reenter the workforce is ethical and good business practice. 

According to Forbes, most companies that lay off employees do not see improved profitability, instead, layoffs destroy trust and confidence. Even companies that handle layoffs well suffer reputational damage in an era where word travels fast and corporate decision-making is under the public microscope. When trying to cut costs or respond to market pressure, executives must consider all options before resorting to layoffs.