Effective and legal strategies for handling layoffs or downsizing

Business and economic challenges may sometimes necessitate downsizing and layoffs. These situations are challenging not only for the employees directly affected but also for those who remain—and for leaders like you tasked with navigating the process.

Successfully implementing downsizing plans and recovering from layoffs largely depend on your leadership and commitment to addressing these challenges effectively. In this article, we’ll explore actionable strategies to navigate the legal, emotional, and operational challenges of layoffs, ensuring compliance while maintaining team morale and productivity.

Legal issues involved in layoffs

The federal Worker Adjustment and Retraining Notification Act (WARN) requires employers with 100 employees or more to give 60 days’ notice of mass layoffs or plant closings expected to last at least 6 months. Mass layoffs are defined as the reduction of at least 33 percent of the workforce and at least 50 full-time employees or at least 500 full-time employees within a 30-day period. Additionally, some states have enacted their own WARN-like laws. Employers should determine whether the state(s) in which they operate have such laws and ensure compliance with both federal and state-specific requirements.

State and federal discrimination laws prohibit discrimination based on certain protected characteristics (e.g., race, color, sex, religion, disability, age, or national origin) when making layoff decisions. Laying off a disproportionate number of older workers or women, for example, would likely be considered discriminatory. Therefore, you should rely on objective, business-related criteria when selecting employees for layoff, and document your criteria for each employee who has been selected. Layoff selections that follow established seniority systems are usually considered nondiscriminatory.

Emphasize communication

Communicate layoff plans and timelines to all employees as soon as possible to minimize rumors and uncertainty. Approach those communications with empathy and transparency, acknowledging the challenges faced by those affected. Don’t speculate on the company’s motivation for the layoff or restructuring, and don’t discuss why individuals were selected for termination. Clearly outline the benefits available to those being laid off, including severance pay, vacation pay, and other applicable resources. Treat laid-off workers with respect and allow them to conclude their tenure with dignity.

Lastly, recognize that managing layoffs is challenging, and it is natural to feel the emotional impact of these decisions. While you may face frustration or anger from employees, remember that your role is to handle the process with fairness and compassion. Focus on supporting all employees, knowing that the circumstances leading to these decisions are often beyond your control.

Support layoff survivors with empathy and leadership

Survivors of a layoff are likely to feel a good deal of stress, and it may affect their work. They might also feel guilty that they get to keep their jobs while their friends have lost theirs. They might feel resentment against you and the organization, and they might also feel resentful about having to work harder to keep up productivity levels with fewer people in the department to share the load. Most of them are also likely to be concerned about their future, wondering if this will be the end of it, or whether there will be more layoffs.

One of the most effective steps you can take is to remain visible and available to employees. Help provide closure by giving employees a chance to come to terms with the past. Be patient and realize that the time needed to adjust to change looks different for everyone.

Give employees an accurate picture of what is happening in the organization after the layoffs. Show genuine respect for their feelings and concerns, and create a safe space for open dialogue. Giving employees the opportunity to feel seen and heard not only validates their experiences but also builds trust as the organization moves forward.

Rebuild your team with a forward-focused vision

To help employees move forward and focus on future planning, consider the following tips:

• Create a vision for the future of your department. To be productive and perform well, employees need direction and a clear sense of what they are supposed to achieve.
• Hold frequent meetings to bring employees together for problem solving and decision making. Group meetings promote a sense of teamwork and allegiance to the newly reformed group. These regular meetings also provide a valuable platform for keeping employees informed and aligned with organizational goals.
• Maintain clear and high performance standards and expectations to prevent any sense of drift or apathy.
• Organize work assignments to balance morale, productivity, and quality effectively.
• Be mindful of roles, as some employees may feel a loss of status due to the layoffs.
• Recognize and thank employees for their effort and cooperation.

Moving forward after layoffs with leadership, care, and compliance in mind

Navigating layoffs is one of the most difficult challenges a leader can face, but with careful planning, open communication, and a compassionate approach, you can help your team through this transition. By adhering to legal requirements, supporting employees with respect and empathy, and focusing on rebuilding a strong and forward-thinking team, you can help your organization recover and position itself for future success.

How you approach this process has the power to leave a lasting, positive impact on both those who are departing and those who remain. Your care and leadership can make all the difference in helping your organization and its people move forward.