Jul 28, 2022 - Economy

How companies should communicate layoffs

Illustration of a pink slip shaped like a broken heart.

Illustration: Maura Losch/Axios

Roughly four out of five Americans are worried about job security, per an Insights Global study, and there could be more layoffs as companies grapple with economic uncertainty.

Why it matters: There’s no easy way to communicate layoffs or rescind offers, but there is a wrong way — like mass Zoom firings, harsh tweets or leaked memos to the press.

Yes, but: Some companies have approached it with civility.

Flashback: In a 2020 internal note — which CEO Brian Chesky wrote himself — Airbnb announced it was laying off 25% of its employees. And this week, Shopify CEO Tobias Lütke sent out a similar note about a 10% workforce reduction.

  • In my opinion, these communications have the right balance of information and heart. 

Here's what they did right:

  • Explained why. It sounds simple, but many companies fail to include a specific reason for layoffs.
    • The pandemic forced Airbnb to go “back to the basics” and pause new initiatives, while Shopify grew too quickly to keep up with e-commerce spending — brought on by the pandemic — that has since slowed.
  • Focused on benefits. Chesky and Lütke publicly shared available benefits — like severance and health care coverage extension — to show they care for those impacted.
  • Discussed what’s next. Airbnb leadership was clear about what to expect and dedicated 1:1 communication for those being let go. Chesky also hosted a CEO Q&A after all terminated employees were notified.
  • Took ownership. Both notes included words of thanks, but most importantly, the executives took accountability and offered sincere apologies.

What they're saying: Johnny C. Taylor Jr., president and CEO of the Society for Human Resource Management says to communicate with empathy and follow these tactics:

  1. Set up 1:1 meetings. Even if layoffs are announced in mass internal notes, 1:1 meetings with a manager or HR representative are a must.
  2. Have a script. Equip your managers with talking points and the correct information regarding timing, benefits and outplacement services.
  3. Answer questions. “Allow proper time, attention and room for questions — and if you get a question you don’t know the answer to, do not guess,” Taylor said. Instead, say you’ll get the answer and respond within a specific timeframe.
  4. Monitor your tone. It’s not what you say, but how you say it. “Increasingly, separation conversations are being recorded,” warns Taylor, so stick to the script but speak with compassion and sincerity.
  5. Keep records. Whether it’s follow-up questions, phone calls or outplacement conversations, make sure to track it.

The bottom line: Letting go of employees is one of the hardest things managers will have to do, but it is possible to deliver this news in a clear, accountable and dignified way.

Editor's note: This story has been corrected to include the accurate name of the Society for Human Resource Management.

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