Article

What happens to your team after a layoff? What you need to know

Don’t underestimate how much a layoff impacts your remaining workers.

6 minutes

April 20, 2023 Adecco

Two workers sit at a table in an office. One is typing at a keyboard. The other has their eyes closed and is rubbing the bridge of their nose.

As of April 10, 1214+ companies have already announced layoffs in 2023. Microsoft, Meta, and Amazon have laid off a combined 38,000 workers, citing high inflation, drained stock growth, and over-hiring during the pandemic. Economic experts predict more companies, especially tech businesses, will continue to lay off employees throughout 2023 making the occurrence more commonplace in the workplace.

Is your organization considering laying off workers this year? Here’s everything you need to know about the effects of company layoffs on your remaining workers and how managers can mitigate these effects to keep your existing workforce engaged and productive.

How company layoffs impact workers:

Morale lowers

Work is such a big part of our lives that layoffs can have a profound effect emotionally on workers. Coworkers can become our best of friends, making it hard for employees to continue working for a company that let go of their closest colleagues. Workers who are not let go can often develop feelings of “survivor’s guilt” with questions like Why did I make it and they didn’t? occupying their minds throughout the workday. Employees feeling guilt can become consumed with questions like these making it difficult to work and difficult to see a future in the company.

But guilt isn’t the only intense emotion felt after teammates are laid off. Remaining workers often develop anxiety thinking that they are next on the chopping block. Trust between a worker and manager is also damaged during company layoffs making it hard for employees to stay motivated.

Productivity declines

Research reveals that nearly three-quarters (74%) of workers who stay at a company after a layoff see their productivity decline while more than two-thirds agree that the quality of their company’s products deteriorated post-layoff. Workers cited survivor’s guilt and anxiety as the main factor behind this productivity hit.

Turnover increases

With a decrease in morale and productivity, it’s no surprise that turnover increases following a company layoff. Analytics firm Visier discovered that workers are more than 7% more likely to quit following a layoff within their team.  This “turnover contagion” as the firm calls it can last up to 105 days post-layoff, showcasing the long-lasting effects of layoffs on employee retention.

What managers can do to prepare for layoffs in 2023

Be present and understanding

Following a layoff, it is imperative for managers to be there and present for remaining workers. This not only safeguards the trust workers have in their bosses but can prevent the decline in productivity normally seen after company layoffs. Studies show that workers who felt their managers were more visible, open, and approachable after announcing layoffs were 70% less likely to report a decrease in productivity.

Be honest

Much of the anxiety workers feel during company layoffs can be mitigated by open and honest conversations about why the layoffs are occurring. Arrange a meeting with your team to discuss the reason behind your company’s need to downsize and relay other options that were considered. If your company is assisting laid-off workers with career assistance or severance packages let this be known as well. When your employees can understand that management is utilizing layoffs to shape the company’s future while treating let-go workers with respect, they’re more likely to bring their best efforts to the job.

Have a communications plan for all managers

To have all managers and employees on the same page, it’s important to have a communications plan that reaches all areas of the company. This will ensure frequent and consistent communication which helps reassure employees during a crisis like company-wide layoffs. Consider dedicating a day or two to management training to help upper-level managers build confidence in delivering empathetic and tactful messaging when it comes to layoffs. You can include the following in your communications plan to give employees the opportunity to ask questions and learn more about your company’s plans for the future:

  • Brown bag lunches
  • Town-hall meetings
  • Regular 1-on-1 meetings with team members
  • Add 15 minutes on to regularly held meetings
  • Directly ask employees what “rumors” are out there during a team meeting
  • Hold a meeting to set up clear goals with remaining team members

Adecco can help

Laying off and retaining remaining workers are tricky for any company to handle, especially in 2023 when big company layoffs are dominating the headlines and causing anxiety for millions of employees. Luckily, our workforce experts are well-versed in the most effective ways to retain workers. Our consultants will provide the most up-to-date information taken from both on-the-job experiences and recent research on ways to keep employees motivated and engaged at work. Call us to speak with a qualified workforce consultant or read our employer resources for in-depth analyses of workplace trends, how current events are shaping the world of work, and tips on how to find, hire, and retain the right talent for your business.

Also, don’t forget that we can help you attract some of those 100,000+ recently laid-off workers – from helping you land on competitive pay and perks to developing opportunities for growth and development.

Contact us today to get started!