Amid current economic uncertainties, many organizations are making the difficult decision to restructure and thus furlough or lay off employees. While these choices are often rooted in financial necessity, the way leaders handle them profoundly impacts company culture, brand reputation and the well-being of those affected. True leadership is tested not in times of ease but in how it responds during adversity. Supporting furloughed and laid-off staff is not only the right thing to do—it is a business imperative.
The Value Of Supportive Leaders During Restructuring
Layoffs and furloughs affect employees’ livelihoods, families and, oftentimes, mental health. Leaders have an obligation to acknowledge this reality and act with compassion and empathy. How they communicate and support affected individuals shapes employees’ long-term perception of the organization and its leadership. After all, just because someone is furloughed or laid off doesn’t mean the professional relationship has to end permanently. Many companies rehire former employees. Leaders who treat exits as transitions can better preserve valuable connections that may benefit both sides down the line.
Empathy during major organizational restructuring is also key for preserving an employer’s brand. In today’s interconnected world, news travels fast. Mishandled layoffs can be a reputational risk, making it harder to attract talent in the future. Consider the case of Better.com. In December 2021, the company abruptly laid off 900 employees via a Zoom call, and the CEO’s delivery was widely criticized as insensitive. The backlash was swift, with employees and the public expressing outrage. Afterward, the company struggled to retain existing employees, highlighting the long-term consequences of poorly managed workforce reductions.
How To Support Affected Staff During Restructuring
During furloughs or layoffs, leaders must foster open communication and provide reassurance to ensure employees still feel valued and supported.
Communicate Transparently And Early
Avoid vague, last-minute announcements as much as possible. Timely transparency around restructuring can help reduce anxiety and prevent the spread of misinformation.
When my organization, CIPE, was planning to undergo a restructuring, we used our next regularly scheduled town hall meeting to share the news promptly. During the announcement, the leadership team clearly explained the reasons behind the decision and what the process entailed. We also offered a space for questions and provided honest, consistent answers.
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Amid current economic uncertainties, many organizations are making the difficult decision to restructure with furloughs or layoffs.