The most ethical way for leaders to communicate about the prospect of layoffs

Be as transparent with your employees as possible.
Be as transparent with your employees as possible.
Image: AP Photo/Lynne Sladky
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It’s a scary time for workers. Four out of five members of the global labor force are currently dealing with business closures or reduced hours as a result of the coronavirus pandemic, and a whopping 1.25 billion work in industries at risk of further layoffs or wage cuts, according to a new report from the United Nations’ International Labor Organization.

As the ripple effects of the crisis move beyond the travel and hospitality industries,  managers in a broad range of sectors may be wondering how to raise the subject of potential layoffs with workers—and whether it makes sense to mention the possibility at all.

The answer to the latter question is a firm yes, according to Kim Scott, co-founder of the executive education company Radical Candor and the author of the best-selling book by the same name. Scott is an advocate for honesty and directness even in the best of circumstances. But in a time of great uncertainty, when many people are already feeling powerless over their own futures, it’s especially important to be as transparent as possible. If layoffs could happen, she says, bosses should say so.

“It’s so tempting not to share the information you have with people right now because the information is scary,” Scott says. But we’re living through a historic pandemic: Everyone is already freaked out. And research shows that most people find uncertainty extremely stressful. Anything managers can do to mitigate that is likely to be appreciated, even if it’s impossible to say definitively whether, or when, layoffs might happen.

One startup leader she works with has countered fear with total transparency, she says. “He just shared all the information: Here’s how much money we have, here’s how much money we’re spending, here’s where I think we can cut. Even though that was sort of scary information, most people felt reassured, because they thought the situation was worse than it in fact was, which is so often true.”

When Scott herself was in a similar position as the head of Juice Software in the aftermath of the Sept. 11 terrorist attacks, she let employees know that layoffs were on the table—and invited them to share ideas about how to reduce expenses in an effort to preserve as many jobs as possible. “Everybody felt they had the full information and that they could help inform how they move forward,” she says.

Eventually, Scott did have to eliminate some jobs at the company. But she was careful to keep the lines of communication open with affected employees even after they’d been let go—a move that may seem counterintuitive for many managers, given that there are plenty of places that treat people like pariahs once they’ve been laid off, whether for fear of retaliation or as a result of the employer’s own guilt.

“If you’re a leader, you can keep in touch,” Scott says. “Say, I’m going to call you in two weeks. If there are introductions I can make for you, I will do it.” Beyond the practical benefits of this offer, staying in contact with workers reaffirms the message that the job loss was no fault of their own. That could help lessen the internalized feelings of failure and depression that are so common after layoffs.

Another way to be compassionate, according to Scott: Provide laid-off workers with a way to stay in touch with their teammates. “Especially in a situation where people may not be able to get a job right away, the community of work is not something you need to cut them off from,” she says. At Juice, she held once-a-month drinks to which both current and laid-off workers were invited. She was nervous about the idea, she says: “I had just fired these people, did I really want to have drinks with them?” But people kept showing up, and the gesture allowed them to access the support of their colleagues.

Of course, happy hour drinks aren’t really possible in the Covid-19 era. But organizing an after-work Zoom, a Google Hangout social hour, or a Slack channel that integrates external members could have a similar effect. The important thing, according to Scott, is for “leaders to show they care.” Severance pay and health insurance of course go a long way, too.