How to make an employee redundant: 5 strategic steps

Knowing how to make an employee redundant is one of the toughest responsibilities an HR team will face. It can be a stressful situation for everyone involved, but a well-executed plan makes the difference between employees feeling valued or being let go without dignity. This guide walks through the five steps to handle the process properly.

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, plus the formal redundancy letter which is a legal document under UK employment law.
• 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 rightswhen being made redundant should be top of the agenda and all legal requirements followed to the letter at all times.

In the UK, employees with 2 or more years of continuous service are entitled to statutory redundancy pay. Statutory redundancy pay is capped at £751 per week, with the length of service capped at 20 years, making the maximum statutory payment £22,530. The minimum notice period is 1 week per year of service, up to 12 weeks. Many employers choose to pay above the statutory minimum, and the comprehensive severance package you offer often shapes how the redundancy is received by both departing and remaining employees.

Employees also have the right to appeal, the right to a reasonable amount of time off to look for new work during their notice period, and the right not to be dismissed on grounds related to age, gender, disability, pregnancy, or any other protected characteristic. Getting any of these wrong can lead to an unfair dismissal claim at Employment Tribunal, with associated reputational and financial cost.

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 helpprotect 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.

If your organisation is going through a redundancy event, the support you wrap around departing employees shapes how the people who stay feel about the business. Careerminds delivers outplacement with a 95% placement rate and an average time to land of 11.5 weeks, across 100+ countries and 80+ languages.

Do contact us at the earliest opportunity to find out what Careerminds can offer you and your company.

The minimum statutory notice period in the UK is 1 week for employees with 1 month to 2 years of service, then 1 additional week for each completed year of service up to a maximum of 12 weeks at 12 years or more. Employment contracts may set longer notice periods which take precedence over the statutory minimum.

Yes. Individual consultation is required in every redundancy case. Where 20 or more redundancies are proposed within 90 days at one establishment, collective consultation with elected employee representatives or a recognised trade union is also a legal requirement. The minimum consultation period is 30 days for 20 to 99 redundancies, and 45 days for 100 or more.

Statutory redundancy pay is calculated based on age, weekly pay (capped at £751), and length of service (capped at 20 years). The maximum statutory payment is £22,530. Employees with less than 2 years of continuous service are not entitled to statutory redundancy pay, though employers may choose to pay enhanced redundancy regardless.

In UK employment law, ‘redundancy’ is the correct term for permanently ending employment because the role is no longer required. ‘Layoff’ has a specific legal meaning in the UK referring to a temporary period without work or pay, not permanent termination. In everyday HR conversation the two terms are often used interchangeably, but the legal distinction matters in contracts and tribunal cases.

Offering outplacement reduces the likelihood of tribunal claims, protects your employer brand, and helps remaining staff trust how the organisation handles change. Careerminds participants reach a new role in an average of 11.5 weeks with a 95% placement rate, which is meaningful to share with departing employees in the notification meeting.

Avoid using redundancy as a substitute for performance management, applying selection criteria inconsistently, removing system access before the meeting, communicating by mass email, or starting the process before completing consultation. Each of these is a common source of unfair dismissal and protective award claims at Employment Tribunal.