A wave of layoffs: how to protect the company’s reputation

Proper communication, empathy, and common-sense help companies fire people without risking reputation damage.

The large-scale wave of layoffs in international companies in 2023 is the beginning of a big storm.

The announced numbers of layoffs in branded companies are impressive. However, the companies are trying to soften the shock with remarks like: “This is just 5% of the total number of employees worldwide”.

The coronavirus lockdowns and economic turbulence of recent years have demonstrated online how layoffs can happen. Sometimes they are unpleasantly insensitive, sometimes, they are so empathetic that they become a public reference for the proper communication of negative news.

In March 2020, more than 400 employees of “Bird”, an electric scooter rental company, were fired because of the difficulties the company faced due to the quarantine.

The employees were invited to a joint video meeting in Zoom, where they were informed of their layoffs. The company immediately deprived all those participants of access to corporate resources and services. The dismissal procedure lasted two minutes.

According to Bird’s former employees, they generally understood that the company was forced to cut staff. However, they still have negative emotions because an unknown person, not the company’s CEO, announced the dismissal.

In May 2020, Airbnb announced the layoff of 25% of its staff (1900 employees) due to the coronavirus. The company’s CEO, Brian Chesky, wrote an open letter to employees about the difficult times the company was going through. In addition to explaining the situation, the letter outlined a large-scale assistance program for all dismissed with a clear action plan to mitigate the negative effects of the crisis.

Airbnb’s case (including the letter’s text and the assistance program’s details) has become an example of the company’s responsibility and reputation management in difficult times.

What can your company learn from these examples, and how can you implement a responsible layoff strategy without significant reputational damage?

Here are six key recommendations for such situations:

Transparent communication: inform your employees about the reasons for dismissal, the process, and the company’s long-term plans. This approach helps build trust and understanding among employees who may one day become your colleagues again.

In addition, each employee is actually a small media source that shares information about the company and its processes — today and in the future. If your communication is unsystematic and non-transparent, it will be perceived and presented in any way that is not in the company’s favor. Therefore, plan your communication and follow the plan.

Support and assistance: assist dismissed employees through career consulting, job search support, and a skills upgrade program. It will demonstrate compassion and allow you to maintain a good relationship for future cooperation.

Thank them for their professional contribution: remember to mention the assistance of those you dismiss. Sincere appreciation for their work will demonstrate that the company values its employees.

Respect and fairness: ensure that the layoff process is fair, considering factors such as employee performance, duration of tenure, and departmental needs. Treat all employees with equal respect and dignity during this difficult time.

Public relations: proactively inform the public about the reasons for layoffs, demonstrate support for employees, and fulfill all social obligations.

Keeping in touch: encourage your team to keep in touch with dismissed colleagues to stay informed about their lives. Invite former employees to corporate events and organize alumni networks — this can lead to potential collaboration or rehiring opportunities in the future.

I suggest a “homework exercise” based on this text for your team: analyze which companies in your industry have made staff reductions and how they have communicated this internally and externally.

Choose the worst example to keep your tonus and the best model to inspire you to act with dignity and efficiency. It will help you develop your communication support for layoffs if they occur.

Combining rational expediency and empathy is a great way to act effectively in a difficult matter, such as dismissing employees.

Sergii Bidenko is an award-winning Crisis and Reputation Advisor to business owners, top managers and supervisory board members. Bestselling book author, cancel culture researcher.

He consults for owners and top managers of companies on issues of strategic reputation management, protection against information attacks, resolving corporate, customer and organizational conflicts.