How to layoff an employee – five strategic steps

Wondering how to effectively lay off employees? It can be a stressful situation for all of those involved. But while this is a daunting prospect, a well-executed layoff plan can make all the difference between employees feeling valued or them being let go without dignity or a kind thought as they embark on a whole new phase of their working life. 

To help you fully understand the whole process of how to layoff an employee, Careerminds is on hand with five strategic steps to take so you can ensure that your layoff event unfolds as smoothly as possible.

Step 1: Recruit a specialist layoff team consisting of managers and relevant stakeholders

Step 2: Create a communication plan for every stage of the process

Step 3: Determine employee selection criteria

Step 4: Train up supervisors and managers

Step 5: Hold a layoff notification meeting 

Depending on how many redundancies you’re making, this isn’t going to be a job for just one person. You need a team behind you to make sure everything goes as well as possible.

Assembling a diverse team of colleagues will help. The team needs to include HR, members of the senior management team, your legal department, and the PR department. The team should also be as diverse as possible in terms of experience, gender, age, and race, to make it effective. 

The team should also contain all relevant stakeholders. Certainly senior leadership and mid-level management employees should take part, to ensure that the right talent is retained so that productivity doesn’t decrease during the layoff event. We cover employee layoff selection further down in this article, but this initial stage is where you pull together the team to help make those decisions.

Communication is always key in these sorts of scenarios. Being open and honest and using a clear communication strategy is clearly very important. It’s a necessary part of the process that will be useful for your management team when delivering the news. While this step might seem too early, it isn’t. When it comes to understanding how to lay off an employee, you need to understand how important the communication is. This is the part of the process that the impacted employees will remember.

Follow this advice:

• The main piece of information that departing employees will want to know is why. Don’t use a personal reason, keep it to a business-related reason only.
• Choose your words carefully. Certainly don’t go down the road of using terms like “trimming the fat” or “getting rid of dead wood.” That’s offensive and would not be acceptable.
• Write a script to help you and other managers stay on track during the notification.
• Make sure the plan contains any email communication you plan to send (if any).
• Stick to laying employees off in person or via video, depending on how your company operates.

Determining who you’re going to layoff and why needs to be as clear as your communication plan. After all, laying off the wrong people could impact your productivity, triggering the need to rehire – a costly and time-consuming process.

Before compiling a list of criteria, consider offering voluntary severance packages as well. There are several benefits to this, as voluntary redundancies have multiple advantages over involuntary ones.

Employees who leave voluntarily are less likely to sue the organisation and are more likely to sign their release in exchange for severance and outplacement services, if these are offered. This is because voluntary layoffs normally leave in a much better frame of mind than those who were pushed, with no choice in the matter.

After offering the voluntary option, it’s time to construct the list of who you’re going to let go. This will look different for every organisation, because every situation and business is unique. Some organisations may take the road of “last-in, first-out”, which often protects more senior members. Others may judge the criteria through performance reviews. 

The fairest way is to educate yourself on how to choose who to select. However you decide to choose, think of the future so you’re setting up your company for success down the line, instead of being blinded by cost savings now.

During and after the event, impacted employees are going to keep looking for answers. Ensure that managers and supervisors have talking points and answers they can immediately impart to lessen the agony for employees being laid off. It can’t be overstated that transparent communication is key to maintaining productivity and staff morale.

If this is overlooked, the rumours can go flying about. There’s little you can do to stop them if you haven’t been honest with all of your employees. So, some coaching of those who are having to give the bad news is paramount. Saying the wrong thing, or passing the blame, can cause a situation to blow up very quickly and get out of control. Leaders and supervisors should have an outline of what they can and can’t say. Having a list of benefits, such as outplacement and severance packages, can help to ease some of the pain of losing a job.

Notifying someone that they are about to lose their livelihood has to be done sympathetically, so it should be carried out in private. It’s a difficult time for your soon-to-be former employee and should be treated as such.

• Prepare a script for the meeting, but don’t read it out loud like a robot. Just have it to hand should you need to refer to it.
• Get straight to the point. If they raise any questions, answer them as best you can but don’t stray off topic. Refer them to HR for further information.
• Remember that surviving employees might be edgy, so reiterate to them that their positions are safe. Don’t say this if there’s a chance you might have to make additional cuts in the near future.
• Improve morale for remaining staff during redundancies by showing them that those who are let go are fully taken care of with packages that include outplacement support.

Part of the overall process, when planning to make some employees redundant, will be to collaborate with your legal team to ensure everything complies with the law. It’s a complicated issue, but needs to be thought through in detail.

For employees, their rights when being made redundant should be top of the agenda and all legal requirements followed to the letter at all times.

Alerting staff improperly is one of the biggest mistakes companies make. Remember all those mass layoffs that peppered the pandemic that took place over Zoom? It was a panicked reaction from fearful employers who didn’t really know what to do. Fortunately, that all seems to be behind us now, but it probably damaged the reputation of some of those businesses.

We can’t say it enough – transparency and honesty is the best policy. One-on-one meetings are the way to go. They might not be pretty, but it’s the employee who’s being laid off that comes out of it worse, so put yourself in their shoes. That means doing everything in your power to break the news in a compassionate manner. Avoid mass layoffs via video calls, emailing impacted employees, or removing security access before even mentioning a layoff is happening, as some companies have done. 

Finding out that you don’t have a job anymore, through no fault of your own, has got to be one of the most stressful things that can happen. On the other hand, delivering the bad news to that person can also bring up a swathe of emotions and anxiety. Let’s face it – announcing layoffs just isn’t fun.

To make the best of a bad lot, you need to combat this with a plan, as it can make a big difference to how the process pans out.

With a clear plan of action, honest communication, and support from a professional outplacement provider that will help protect your brand, layoffs need not be as terrible as first thought. Understanding how to properly lay off staff can empower businesses into making those tough decisions that keep them competitive for more challenges in the future.

As previously mentioned, communicating any redundancies to the affected employees should ideally be done face-to-face or, failing that, in a video call. Sometimes these meetings or calls may have the person’s manager or an HR staff member in attendance as well. Either way, the meeting should be as private as possible to respect the outgoing employee and avoid panic spreading amongst the rest of the staff.

It’s all in the timing as well. Some experts pinpoint Tuesday as the best day to hold a layoff, while others prefer the end of the week. Whichever day you opt for, this decision will depend on the hours your employee works and what days they have off.

Listen up, as this is a big one. We can all understand that layoffs are emotional and sensitive, with people being on edge, not sure what’s to be expected. Therefore, it’s important that it’s handled with the right amount of grace and compassion, but without too much sympathy as this can get your company into trouble. A script might come in handy so that you can ensure you cover all salient points.

Don’t spout platitudes such as “Don’t take this personally” or “This could be a great opportunity for you,” as they’re meaningless and come across as empty rhetoric. It’s not going to be easy giving them bad news, so the least you can do is sound genuine when you say “I’m sorry.”

The meeting should be short and to the point. Deliver the news as plainly and factually as possible, give a reason for the layoff that isn’t personal, allow the impacted employee to respond, and alert them to what the next steps are. That could include a package with severance and outplacement, which should incorporate coaching services. While it might seem simplistic, that is a solid, by-the-book layoff notification.

We know that layoffs are stressful for everyone at an organisation, whether they’re being let go or not. 

So let’s summarise how to layoff an employee in the best possible way:

• Communicate clearly with stakeholders
• Plan the event in advance by looking at all sides
• Execute that plan with everyone in leadership and management on the same page
• Diminish the stress and the risks to your brand by performing all the steps above

If your organisation is having to go through a layoff event, you’ll want some support and outplacement services in place for departing employees. Do contact us at the earliest opportunity to find out what Careerminds can offer you and your company. 

Elizabeth Openshaw

Elizabeth Openshaw has over 12 years of experience in the job search sector, including extensive expertise in outplacement and CV reviews. Previously a Journalist on national publications, she is Director of her own company, OpenDoor CV Expertise Ltd. You can connect with her at Elizabeth Openshaw | LinkedIn.