How a company handles layoff announcements internally to employees, as well as externally to shareholders, government leaders, communities they call home, and other stakeholders, impacts how it is perceived and valued after it downsizes and then rebounds.
Once the specific job cuts are decided, the news must be communicated clearly - first to the affected employees and then to the entire company. Don't let rumors break the news. Be sure the human resources department has easy-to-understand explanations about the severance, outplacement, and benefits continuation options.
Emphasizing how the cutbacks will strengthen the company's position is a key message. Whatever is done, frame the decisions in economic and human terms. Take ownership of the decision rather than commiserate about being a victim. Use the opportunity to strengthen employee trust in management.
Doing so demonstrates that the company has a clear strategy to stay in business and emerge poised to expand when conditions improve. Investors will be looking for signs the company has a well-thought-out plan and is adept at managing effectively during a crisis. They will also assess the effectiveness of employee communications, a leading indicator of financial performance.
Senior executives should also work to engage the support and cooperation of the "survivors," who are coping with anxiety in the face of vacant offices. Understand their concerns and empathize with them. Lead an all-employee meeting to stress how their continued efforts are valued; outline the plan for moving forward; and assess the opportunities and difficulties. Surveys done by the Society for Human Resource Management show employee productivity either stays the same or worsens after layoffs. You want to minimize the possibility of the latter happening.
To sustain morale, consider more frequent meetings, a telephone hotline, layoff-specific Web pages, and additional counseling services to deal with work and personal issues resulting from the downturn. Tell as much as you can, as quickly as you can. Look for ways to regularly show how the company is staying afloat as a result of the difficult measures it has taken.
Layoffs often distract a company from its focus, particularly taking attention away from customers. In your communications to employees, encourage them to stay close to clients. Remind them about past levels of customer satisfaction. Look for ways to gather and analyze customer opinions quickly. Positive feedback to doubting employees can ease personal worries about how the economy might threaten their jobs. It can also reaffirm the company's value among buyers of its goods and services.
James David Spellman runs a strategic communications firm in Washington, DC and is an adjunct professor at George Washington University.