How to Announce Layoffs or Terminations as an Employer

The end of the year in employment is not only associated with merry Christmas parties, financial rewards or well-deserved vacation. It is the period when employees are most often laid off.

The period from November to January is often associated with corporate reorganizations and budget changes. Companies close budget cycles, analyze performance and prepare new plans. If there is a need to reduce costs, layoffs are often made at this time.

The highest unemployment is always in December and January. In January 2024, unemployment in the United Kingdom was 4.2%, in the summer it fell to 3.8%, only to rise again to 4% in November 2024.

Downsizing is one of the crisis situations, which, however, if managed correctly, may not have a negative impact on either party, as it may seem at first glance. The weak point of layoffs is emotions. The more emotions are in the air, the more we need humanity, understanding, and empathy. Both the fired employees and those who remain in the company are watching how the company handles this situation. If a company chooses to ignore emotions and opt for a blunt, impersonal approach, the result can be a loss of trust – not only among current and former employees, but also among business partners or customers.

However, a properly executed resignation can have the opposite effect: even if the dismissed person is disappointed, they can speak positively about the company if the process was fair and transparent. Ideally, they can take away the feeling: “Yes, they fired me. But the way they did it was so professional and humane that I would like to come back here if the opportunity arises.”

How to give notice?

When giving notice, it is important to remember that every employee is an ambassador for the company, even after they leave. How you treat people when they are dismissed will be reflected sooner or later. A negative experience can resonate on social networks, in professional communities or even among your customers.

The following are essential for giving notice:

• A fair approach, humanity and respect – deal with the person personally, tell them the matter sensitively
• Transparency – tell them why you are dismissing them
• Avoid unnecessary emotions – try to have a substantive debate, leave room for expressions and arguments from both sides
• Feedback to the company – ask the employee to evaluate the company processes, culture or the setting of their position
• Feedback to the dismissal process itself – with the help of HR, ask the employee for feedback on the process itself after the dismissal

The company should have made every effort to lend a helping hand. As difficult as it may be and employees may be stubborn. But just giving them tips on career advice, financial support, such as various benefits paid by the employment office, or recommendations for other job positions. Let’s not forget that every human gesture has its own weight – and karma is free. In addition, caring about how employees will do after being fired will strengthen your reputation as an employer who values ​​​​their people even in difficult times. And if the employee is entitled to severance pay, do not forget to pay it to them.

Treating someone ‘like a human being’ should be the norm, not the exception. If you treat your employees with transparency and respect, you will not only earn their respect, but likely their loyalty in the future.

What to avoid when giving notice of termination?

• Never announce a layoff via email or communication channels such as Slack. Always tell the person about the termination in person and preferably in a safe environment – ​​not in the hallway or the kitchen.
• Make sure that the person in question finds out about the termination from you. Communicate the information in time before the person is told by word of mouth.
• Pressure to sign a termination – threats or other unethical practices are not part of the termination process, and you are only playing against yourself. It is very easy to lose the reputation of a good employer and difficult to regain it.

Employees across the EU have a high level of legal protection against practices such as pressure or threats of dismissal. If an employer has unfairly terminated an employment relationship, the employee can demand that the employer continue to employ them.

Layoffs and the impact on company culture

But employee layoffs don’t just affect those leaving the company, they affect the entire team and company culture. If you don’t handle the situation, it can usually lead to:

1. Reduced morale and trust among employees:
   Layoffs often create a sense of insecurity and stress among remaining employees, who may be concerned about their own position. This can lead to a drop in morale, loss of trust in management, and lower engagement at work.
2. Change in team dynamics and working relationships:
   The departure of team members disrupts established working relationships and team dynamics. Remaining employees may be forced to take on more tasks, which increases their workload and can cause tension.
3. Long-term impact on company reputation:
   If layoffs are perceived as unfair or poorly communicated, they can damage the company’s culture and reputation externally. This can affect the company’s ability to attract and retain talented employees.

When laying off employees, be sure to inform and explain your steps to other employees. Consistent planning, transparent communication, and support from remaining employees will help minimize negative impacts on company culture.

Conclusion

And finally – don’t treat people as a cost item, but as an investment. With all that goes with it.

Layoffs are a painful process, but they can be done in a way that preserves the dignity of all involved. Fairness, transparency, and humanity are key. Let’s remember that these decisions will affect not only current employees, but also the future perception of the company. Investing in a human approach pays off – maybe not immediately, but certainly in the long term. And you don’t need any survey data to do that. It’s in tough times that a company’s true character is revealed. It should be the standard to be among those who inspire with their approach and maintain humanity even in the most difficult moments. This is doubly true for startups.