Layoffs are never easy—for leaders, employees, or the company as a whole. But the way they’re handled can make all the difference. A rushed, poorly planned process leaves scars on morale, trust, and reputation. A compassionate approach, on the other hand, acknowledges both the business realities and the human impact, helping protect culture even in the toughest times. By preparing carefully, communicating with empathy, and prioritizing dignity, companies can navigate layoffs without destroying the relationships that matter most.
Layoffs are one of the toughest things a company can go through. No leader dreams of telling people their jobs are ending, but business realities, whether it’s restructuring, slowing sales, or shifting priorities, sometimes make it unavoidable. How you handle that moment says a lot about your organization’s values.
At Next Level Strategies, we remind clients that layoffs affect people and culture as much as the balance sheet. They are real experiences that leave a lasting mark on employees and the company. When handled poorly, they crush morale, weaken trust, and harm reputation. When handled with respect and preparation, compassionate layoffs protect relationships and can strengthen culture.
Before diving into best practices, it’s worth pointing out the difference between a layoff and a termination. A layoff has less to do with the employee’s work and is more about the company’s need to cut costs, reorganize, or shift direction. Terminations (or firings), on the other hand, usually happen because of poor performance or misconduct.
That difference matters. If you let someone go for reasons beyond their control, you owe them clarity and compassion, and the way you communicate the decision sends a message not only to those leaving but also to the employees staying behind.
When layoffs are rushed, errors can be made. Paychecks get delayed. Benefits paperwork is unclear or even missing. People hear rumors before official announcements. Those mistakes create unnecessary stress and can turn a difficult situation into a chaotic one.
Planning ahead makes all the difference and is essential for a respectful layoff. At a minimum, leaders should work with HR, finance, and legal teams to make sure:
Think of it like preparing for a big client presentation; you wouldn’t show up without rehearsing or having your materials in order. Employees deserve the same level of respect.
The actual conversations with employees are the hardest part. People remember those moments word-for-word, sometimes for years. A bad experience can linger and even follow the company online in reviews and social posts.
Some guidelines that help:
The follow-up announcement to the team that remains is equally important. People will naturally wonder if more cuts are coming or if they should start job hunting. Being upfront about the business context and sharing how leadership plans to move forward can help calm those fears. We also strongly feel that if more cuts are coming, we should cut deeper once rather than a continued series of layoffs. Multiple rounds of layoffs create distrust and job insecurity.
Over the years, we’ve seen the same layoff mistakes repeat themselves. Some companies spring the news on people with no warning, eroding trust the moment the announcement is made. Others let the rumor mill get ahead of them, so employees hear whispers before leadership speaks, and credibility is lost. Too often, compliance is overlooked — legal review skipped or severance offers mishandled — leaving the company exposed to lawsuits. Each of these missteps adds unnecessary risk at a time when the goal should be to lessen it.
Losing a job is stressful enough. A little support can go a long way in helping former employees land on their feet. Severance pay helps ease the financial blow, and pairing it with practical tools, like outplacement services, resume coaching, or introductions to recruiters, shows that the company truly cares.
A well-known example is Airbnb’s 2020 layoffs. They gave generous severance, extended healthcare, and created a talent directory to help former employees get hired quickly. The result? While thousands were let go, the company was widely praised for handling it with humanity. That’s the kind of reputation every organization should aim for.
After layoffs, the remaining employees often feel anxious, guilty, or unsure about leadership. If those feelings aren’t addressed, productivity and morale can plummet.
Leaders can help by:
A good analogy is to think of it like supporting a team after a tough loss in sports. You can’t ignore the emotions, but you have to bring people together and remind them of the game plan moving forward.
Compassionate layoffs are not a soft skill or an act of generosity. They are a business necessity. The way a company handles difficult transitions influences morale, retention, job security, and even its reputation in the market. Former employees share their experiences on Glassdoor, LinkedIn, Facebook, Instagram, and in conversations with peers. Those stories define your employer brand.
At Next Level Strategies, we guide organizations through layoffs with clarity, empathy, and fairness. Our approach helps protect trust with current employees, maintain relationships with those departing, lower your risks, and preserve the reputation you’ve worked hard to build.
If your organization is facing tough staffing decisions, it’s critical to handle them the right way. Reach out today by filling out the form below or calling 415-876-NEXT, and let us help you manage the process thoughtfully while protecting your people and your reputation.
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Employers can approach layoffs with empathy, clear communication, and fairness, providing notice, explaining the reasons, and treating affected employees with respect throughout the process.
HR should communicate transparently with remaining staff, acknowledge concerns, provide reassurance, and maintain consistent support to preserve trust and engagement.
Employees should be offered resources such as severance packages, career counseling, job placement assistance, and access to mental health support to help them transition smoothly.
