Fi 4 Ripple Effect

Navigating the Murky Waters of Layoffs and Their Ripple Effects

Looming fears of a recession, as well as the effects from record high inflation rates, have seen a surge in layoffs over the last year. And while navigating the legalities and sensitivities that accompany laying off employees, employers also have to think about how they can effectively manage the ripple effects that these reductions to the force will have on their remaining team members.

If you are a company who finds themselves feeling the pinch and getting ready to downsize, there is a lot that will need to be considered. Having the proper HR support to help strategize with all the sensitivities that come with legal compliance, increased responsibilities, new leadership appointments, and anxiety over restructuring will ensure that your workforce remain informed, engaged and productive.

To do this, we divide the process of layoffs into three parts:

1. Executing the Layoff(s)

Conversations around layoffs are never easy, and it is important to approach them with as much care and compassion as possible. Employees may respond differently to this news, so it is important to know what to expect and how to respond appropriately. The legal implications then need to be considered: does the company offer a severance payment? Has the proper period of notice been given? Could this dismissal be at risk of infringing against a person’s right to not be discriminated against?

The legal compliance can be tricky, especially in the US. Aside from seven states, federal law says that a Worker Adjustment and Retraining Notification (WARN) must be given to employees when a company has over 100 workers and is laying off 50 or more staff members during a 30 day period in a single location. There are some caveats to this, so it is important for organizations (especially larger ones) to know exactly what is expected of them to avoid any potential legal action, while also supporting their departing employee in every way they can and should be.

2. Communication Strategy

The period that directly follows a set of layoffs can be particularly sensitive, but with the right communication and planning strategies, this experience can be executed with delicacy and precision. Our biggest recommendation is transparency – with those remaining staff, leaders need to be open and honest about why these layoffs have taken place and how they are going to set the business up financially for the future.

This should then be followed up by highlighting the plan for moving forward, and taking care to ensure that each staff member understands if there have been any changes to their responsibilities and what support is available to help them adapt to those changes.

3. Supporting Your Remaining Employees

Speaking of available support, this is where employers need to be managing the potential long-term effects of layoffs. These can take shape in those employees who have absorbed the responsibilities of their departed colleagues, or those who have been placed in a new managerial role.

For the former, it is important to be clear about the new expectations of their role to avoid falling into the trap of ‘quiet promotions’. And to mitigate risk of burnout, ensure that these employees have a direct report who they can go to if they need support and further training to manage this increased workload. It is also very helpful to be able to offer a sense of how long they may have to do this, and whether or not it is for the time being until someone can be brought back on later down the line. Setting expectations is going to be key to keeping engagement and productivity levels up.

And for those who have been promoted to managerial roles, they may need to be rapidly upskilled to manage a group of people successfully. We would either align them with a coach, or facilitate training sessions on coaching, feedback, and performance development so that they feel prepared to manage and will do so effectively.

OrgShakers have a lot of experience in supporting clients through a layoff period, and so if you are an employer who finds themselves needing assistance in change management, please feel free to reach out to me at to discuss the services we can offer you.

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