A Manager’s Guide to Managing Corporate Layoffs and Downsizing

Ask any manager and they will probably tell you that one of the worst aspects of their job is to let employees go due to downsizing. These situations can be especially difficult if the employees are loyal and productive rather than terminating due to a performance issue. If you find yourself in a similar scenario as a leader, if you do not take the time to handle a downsizing correctly, these could go very wrong. Legal liability, the negative backlash on social media, and more can result. See tips below on how to manage an employee layoff conversation.

  • Show Compassion. Compassion is key and should be at the core of all communication with your employees being laid off. This is about to be a jarring and drastic life change that will impact them financially, professionally, and emotionally. As an HR expert, Steve Barker, notes, “They will go through (to some degree) a formal grieving process not dissimilar to losing a loved one, ending a relationship, or making some other type of unanticipated life change.

  • Be honest. When speaking to soon-to-be terminated employees, be honest about the reasons leading up to this big change. Let the person know that the layoff does not reflect on their impression of them as an employee. This will help the individual process the change.

  • Listen closely. After explaining the reasoning behind the decision, listen to what the person has to say. Most employees will be understandably upset when you give them the news of their termination due to downsizing/layoffs. One of the most important things you can do during this meeting is to listen to help them through the grieving process and ultimately understand the situation.


No one enjoys terminating an employee (especially a good one), but you can do yourself, the employee, and the company a huge favor if you take the time to properly prepare. When leaders handle the process well, they can also reinforce their commitment to the remaining staff, and communicate the mission so that the organization continues to thrive.

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