Do’s and Don’ts for HR Managers to Follow When Downsizing

August 23, 201610:51 am2635 views

Volatile markets and economic downturns have not just led companies to reconsider their hiring decisions, many are also considering layoffs seriously to restructure operations and as a cost-cutting measures.

Terminating good employees is the last resort for companies looking to thrive in the competitive difficult times. And yes, it’s the most painful decision for HR managers to handover pink slips to employees who have been associated with the company for long and announce the restructuring to staff at large.

While reducing workforce can seem to be the most sensible business decision, such announcements are not always welcoming by employees (unless they are intimated prior) and tend to evoke emotional reactions such as outbursts and anger from staffers. Conducting effective layoffs requires careful planning by HR managers on how to make the final announcement to the workforce.

The layoff process if not planned carefully to meticulous detailing, can incite bad behaviour from the departing workforce, impact company brand and hurt employer reputation in the industry.

Further, unplanned layoffs can result in lowering employee morale and the trust factor of new hires looking forward to be a part of the brand in future.

“Nothing can poison employees’ morale faster than watching their former colleagues, be shown the door, abruptly and disrespectfully,” says Michael J. Canavan, a labour and employment attorney in the law firm of Pepper Hamilton LLP.

See also: Why You Should Consider Employees’ Salary Raise?

“It’s critical to ensure that your remaining employees maintain their morale, and that they stay motivated under the pressure of trying to maintain operations with a decreased workforce. This is a critical, but often overlooked, aspect of any downsizing plan.”

HR managers, senior leaders and the top management should be proactive in planning and executing the layoff process. Shedding staff too quickly could make the process too cumbersome and difficult to miss out on some important factors such as lower employee morale, parting on good note with employees, company reputation management, trust and reliability.

Some preliminary meetings are often needed to discuss about how, when, and who will announce and be involved in the layoff process.

Here are some Do’s and Dont’s for HR managers to follow when downsizing:


  • Hold a face-to-face communication

Discussing a crucial issue such as layoff with an employee should be conducted in the most polite manner with a personal face-to-face communication. However, today’s digital medium of communication has made it much more convenient for professionals to announce such critical decisions to an employee over emails, however such impersonal approaches are never appreciated by the employees.

Employee meeting with the manager and representative of the HR department should be conducted to ensure smooth layoffs with a direct communication.This will ensure that the company’s brand image is maintained even during times of crisis.

  1.  Be Open to the Employees

Some senior executives fear revealing company’s financial standing to its employees, which is a way is responsible for the massive layoffs. It is important for employers to realize that employees deserve to know well about the real condition of the company they are working for.

An early caution of possible layoff would make the employees prepared to face the termination. They would further view the company, as open, honest and transparent in its approaches to respect and value the employees, even during layoffs.

  1. Guide the employees during the transition

A great company will not neglect its employees, who are laid off. Instead they will try to help them find new opportunities outside the company. Employers should be active and supportive to guide the employees during the transition period, and help them in their next job search with effective recommendation letters and experience certificates.


  • Blame others for the decision

Some managers are not well-prepared to announce the decision for layoff from the top management to their team. They rather follow a ‘blaming approach’, wherein they tend to place themselves as messengers of an organisation’s news and react as if they have no control over the final decision made.

Managers should keep the announcement concise, crisp and professional. They should not play the victim, or even seek being a scapegoat to avoid the responsibility or blame.

Blaming others for the decision made will not resolve issues on hand, even pop out the displacement or reduce the shock and disappointment faced by the employees at large.

  • Make the layoff up for a discussion

Employers should be assertive and clear in delivering the layoff decision. Some topics like benefits and severance should be fixed by the related departments and announced along with the layoff announcement. Such clear and assertive decisions will steer clear of the conflicts and debates among employees.

  •  Do not make any false promises

Some false promises made by the employer or manager to calm down the impact of the situation, will only lead to further disappointment and lack of trust with the company.

Managers are better to not make any false promises such as adequate job references or rehiring in the future, when the company picks up business momentum and so on.

Conducting layoffs is tough, therefore employers are required to be tactical and professional in their approaches when executing the process.

Valuing employees for their contribution and ensuring they exit with respect is the key to executing successful layoffs.

Next read: Did Your Employees Choose the Wrong Career Path?

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