I still remember the morning our CEO walked into the boardroom with the kind of silence that says everything. Our annual sales had dipped, the market was volatile, and the spreadsheets on the screen showed the writing on the wall. We had to prepare for a layoff.
As a communications lead at the time, I’d worked on countless memos, but none felt as grim as the one I drafted later that week. Watching talented peers pack up their desks made me realize that layoffs don’t just trim the fluff. Sometimes the way you handle layoffs can reshape trust, identity and culture.
Years later, I’ve learned that how you prepare for a layoff determines not only how smoothly the process unfolds but also how your company rebuilds trust afterward. Poorly handled layoffs can go viral in minutes, damaging employer reputation and eroding trust for years. Take, for instance, Cloudflare’s widely circulated Tiktok video, where an employee’s layoff meeting exposed a lack of empathy and transparency. The video, which has garnered millions of views, sparked widespread criticism about the company’s failure to handle the layoff professionally.
On the other hand, Airbnb’s 2020 layoffs were widely praised for their compassion and transparency. CEO Brian Chesky personally addressed all employees, explaining the reasons for the layoffs and offering generous severance packages. His personal approach proved that with thoughtful planning and open communication, even difficult decisions can preserve human dignity and loyalty.
Companies can learn not just how to prepare for a layoff, but how to do so in a way that maintains integrity, protects culture and ensures employees feel respected and informed.
Start with honesty
Before deciding how to layoff employees, explore every possible alternative. Could you reduce hours, freeze hiring, offer voluntary sabbaticals, or reskills workers into critical roles?
Treating staff reductions as transitions, not terminations, can save relationships and talent pipelines.
At a mid-sized tech company I once consulted for, leadership offered temporary four-day workweeks and cross-departmental training before announcing cuts. The move delayed layoffs for six months, and when reductions eventually came, they were smaller and more understood.
That’s the first lesson in how to prepare for a layoff: communicate openly before the crisis hits.
Build fair criteria
When layoffs become unavoidable, clarity becomes your shield. HR leaders emphasize setting transparent criteria for how to layoffs workers, whether based on redundancy, performance, tenure, or skill relevance.
During one particularly tough RIF, our HR head insisted on a single slide that showed exactly which metrics guided the decisions. It wasn’t easy to show, but it silenced speculation. Fairness, even when painful, is the bedrock of trust.
Understand compliance
No guide on how to layoff employees is complete without a deep dive into legalities. Review your country’s employment laws, notice periods, severance obligations, and anti-discrimination requirements. We recommend preparing paychecks, severance documents, and non-compete waivers in advance to avoid chaos on announcement day.
For unionized or multinational teams, consult legal counsel early. Remember, compliance doesn’t just protect the company, it protects employees’ rights and your brand’s integrity.
Communicate with empathy before, during, and after
Layoffs are 10% logistics and 90% communication. When planning how to prepare for layoff communications, start with a human tone. Preparing a clear script for managers, allowing space for emotion, and offering concrete next steps like career support and references goes a long way.
In my case, after one difficult downsizing, we hosted a live Q&A session immediately after the announcement. That simple act softened the blow and helped the remaining employees process the change.
Post-layoff communication is equally crucial. Acknowledge the loss, reaffirm the mission, and share how the organization plans to move forward. Employees who stay behind often feel guilt or uncertainty, and silence amplifies both.
Offer outplacement and morale support
How companies treat people after they leave says more about culture than any policy handbook. In every plan for how to layoff workers, include support such as severance, resume help, job-matching assistance, or emotional counseling.
Equally important: support those who stay. Survivor’s guilt is real. Organize one-on-ones, reassign workloads fairly, and publicly recognize contributions. In the long run, it’s the “stayers” who decide whether your culture heals or hardens.
Prepare financially and mentally
To prepare for a layoff effectively, start long before one looms. Run scenario simulations: what if revenue drops 20%? What’s the cost of a 10% headcount cut? Who are your essential employees?
When I joined a publishing firm in a downturn, leadership had already modeled three versions of the next year’s budget from “steady” to “storm.” When layoffs became necessary, they had a plan within hours. Preparation doesn’t remove pain, but it replaces panic with purpose.
Furloughs, layoffs, and RIFs are never easy, but the difference between chaos and clarity lies in preparation. By understanding how to layoff employees, establishing fair and transparent criteria, complying with legal obligations, and communicating with empathy, companies can navigate even difficult workforce reductions with dignity. Thoughtful planning ensures that departing employees feel supported, remaining staff stay motivated, and organizational culture remains intact. Ultimately, learning how to prepare for a layoff is not just about mitigating costs it’s about preserving trust, protecting your reputation, and ensuring your company emerges resilient and ready for the future.
Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.