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5 Tips for Leaders During Layoffs

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By Rocki-Lee DeWitt

Downsizing a company provokes anxiety at all levels – from those who will be let go to those managers who are responsible for carrying out the layoffs. As a business leader overseeing this process, it is important that you work to retain your managers and build their commitment to the organization’s future.

By understanding how workplace tensions impact managers’ views of you and the company, and working to support managers through this challenging process, you can engage them in leadership and use this transition as an opportunity to elicit greater commitment to your company’s future.

Are you leading your company through downsizing? Here are five tips effective leaders can use to engage managers in this process, based on research into the roles of lower- and mid-level managers who work at companies undergoing downsizing:

Be sure to incorporate managers’ knowledge in your layoff decision-making. Everyone knows that layoffs are not unusual in a competitive global marketplace. Your company is one small part of a complex economy where buyer preferences shift. Your managers often have a perspective that needs to be considered in the decision-making process.

Use your managers’ understanding to hone your message. Explaining how the layoffs contribute to the company being stronger going forward is crucial. Credible communication depends upon accurate representation of the situation facing the company and upon the strategy that will be used going forward. Give your managers a chance to probe the future business logic before you place them in the communication hot seat. If they have had an opportunity to air and reconcile their own misgivings they will be more capable of addressing the misgivings of others.

Be honest with your team as you come to terms with and accept your role in the layoffs. Were you deeply involved in top-level decisions leading up to the downsizing? Or were you put in a position of being giving a choice between initiating layoffs or keeping your job? Accept your role and explain it to your managers. Doing so will help you, personally and professionally, in the long run.

Connect and network with other leaders outside your industry who are experienced with downsizing. How do they see your proposed downsizing as fitting into its overall strategy and marketplace position? Hearing their perspectives may help you understand the challenges of using downsizing to business performance. Connecting with others also might help you if you need to look for another job.

Study the severance packages in detail to prepare for questions from managers. Again, consider the global economic context in which the layoffs were made and consider how generous the severance packages are. If you believe the packages are fair, communicate this to employees. If you don’t believe they are fair, and you find yourself becoming angry with your company, then it’s probably time to look for another job – or even think about leaving the industry. You can be support your employees, organization or business if you feel good about the manner and work you are achieving.

It goes without saying that downsizing can be stressful for everyone involved. However, it’s part of reality in today’s global marketplace. As a leader, your organization will benefit by your preparedness and level of engagement with this critical process. By following these practices you can plan ahead for how you might deal with downsizing, should it occur in your company.

Dewitt, business leadership
Rocki Lee DeWitt

Rocki-Lee DeWitt, Ph.D., is a Professor of Management in the School of Business Administration at the University of Vermont.