The word “layoff” is a word that sparks unease in any workplace. After all, it’s associated with a loss of income for the worker, as well as a sign that doesn’t bode well for a company. While a layoff is primarily a defensive management move, it is important for a manager to understand how to properly lay a set of workers or an individual worker off.
Layoffs Vs. Other Forms of Termination
A layoff is not the same as termination of an employee. It is an involuntary separation from work initiated by an employer or manager. It is through no fault of the employee, and keeps them eligible for unemployment insurance, but losing other benefits. Most of the time, laid-off workers also still get to keep their investments in a company retirement plan such as their 401k.
A layoff differs from a furlough as well, in the sense that it is generally permanent. A furlough is when workers are idled for a time as a result of repairs, or another event requiring a temporary work halt, while also continuing to receive their benefits with the expectation that they will eventually return to work. Layoffs are genuinely utilized to remove groups of people at a time, ranging from several individuals, or even thousands. They are generally prompted by bankruptcy, financial hardships, or even being bought out by a larger company.
Layoffs often correspond with significant economic events. In the U.S, employers laid off employees en masse
due to the drastic downturn in demand during the COVID-19 Pandemic, as many areas closed down travel, dining, and service. According to the U.S Bureau of Labor Statistics
, over 20 million jobs were cut in April 2020 alone.
Understanding what makes a layoff is critical to being able to conduct one. But there are a few steps to take before signing the final papers to let go of a series of workers, including a meeting, as well as several other steps.
What to do before the Meeting
Before the meeting, a gameplan needs to be established. To start this gameplan, what positions are slated to be cut? Is there any alternative besides completely laying off these positions? In addition to this, finances of a layoff need to be considered.
Removing workers with a layoff requires a severance payment, and sometimes also advance notice. It is extremely important to consult human resources or any form of legal department to determine if legal advance notice is required. Violating this can result in serious fines.
Determining if some employees will be needed for a transitional period can be critical for the business. Not every layoff conversation will be identical, since some employees may have information that would be valuable towards the rest of the company. For example, if you are removing about a quarter of an operations team, the remaining three-quarters might not necessarily have had the removed’s responsibilities. Therefore, keeping that quarter temporarily to train the remainder of the team, with compensation of course, would be very valuable.
As stated before, meetings need to be scheduled with any staff members potentially being laid off. The amount of members in a business could qualify it for the Worker Adjustment and Retraining Notification Act,
which legally mandates that employees laid off receive at least two months’ notice. Therefore, the date of this meeting may be flexible depending on when the business is obligated to give notice.
When scheduling the meeting, consider days before a weekend or a holiday to give the employee time to cope afterward. Being laid off is a painful experience, and understanding how to alleviate some of the pain associated with this can be valuable. Remember the following- for the manager, this is just less people to pay, but for the individuals being cut, this means the end of a regular income, no 401k, and no other perks, such as health insurance. All in all, this is a very stressful time.
During the Actual Meeting
When actually meeting with the employee, there are a few things to consider. Pick a time and place that is both private and neutral, such as a conference room. This time should also allow for an employee to leave the building privately. Layoff meetings might also need to include other people, such as an HR representative, or potentially security as well.
Have any paperwork or materials needed for this meeting before the employee gets to the meeting. This allows it to be as concise as possible. This often includes termination letters, COBRA
papers, a final paycheck, severance paperwork, and other items related to the severance packet.
Remember what the objectives to this meeting are. For the manager, as well as the company, the goals are the following:
- Have a concise, but compassionate meeting to inform the employee that their position is to be eliminated
- Protect the employer brand, especially regarding their reputation for future recruitment
- To be as courteous to the employee as possible
- Deliver the message to the employee for them to hear clearly while retaining dignity
While keeping these goals in mind, deliver the message as quickly as possible, while still being kind. Have a box of tissues on hand as well. Praising previous accomplishments can help the employee’s ego. If the company has the ability to do so, provide outplacement services and job counseling. Outplacement services can help with job-searching and resume writing, as well as consulting. This shows that the company can truly care about the employee.
At no point should there be anger or disappointment displayed towards the employee. This is a painful time already for the employee, and it doesn’t need to be further compounded by adding more negative sentiment into the meeting. Be ready to address questions and objections to your statement. Always provide some form of support for the employee. After all, you may be able to hire them in the future, so avoid burning a bridge with them. Finally, don’t hesitate to offer to write a letter of recommendation for their next job, or act as a reference. Being laid off can put someone into a stupor. Understanding how to care for them can really make a difference.