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Repairing Company Culture Following a Layoff

Any time a company or employer has to make the tough call to furlough employees or make permanent personnel cuts, it’s never an easy decision. Whatever the contributing factors that led to deciding who to keep and who to let go, making those choices hurts. A lot. And regardless of the reasons behind choosing to fire a bunch of people at once, one thing is always true: it can damage the company culture. 

Those who “survived” are traumatized, being forced to adapt quickly to the imposed change and wondering if more layoffs are to come. As an employer, you may assume that those who were kept would be grateful for still having a job, and should interpret their still having a job as your appreciation of their value. But the reality is often quite different. 

Employees who were deemed key people and were spared can grapple with survivor’s guilt and lingering questions. Why did this person get to keep their job when someone else did not? The survivors are forced to process and perform through a huge change. And depending on their ability to work through this change, they can feel unmotivated, unfocused, and with a shaken sense of trust in the security and stability of the company itself. It is not uncommon for those who were spared the job cuts to seek employment elsewhere following a layoff. 

So what can employers do to reinforce their commitment to their remaining employees and get the company back on track?

If reducing overhead was a contributing factor to the furloughs or layoffs, it may feel especially painful to think about spending more money on talent, but the period immediately following a layoff is actually the optimal time to invest in your employees. Here are a few things that can help the remaining employees manage their survivor guilt and emotionally reinvest in your company. 

Reinforce loyalty and communication between the company and the employees 

The reality is that the trust and security that your employees held for your company has been fractured. Be as clear and open with your communication as possible, especially around the reasons for the downsizing and what comes next. Share details of what your company is doing for those employees who were let go, such as severance, job placement assistance, or other services, if applicable. 

According to a study that measured layoff survivor stress, managers with high scores for visibility, approachability, and candor reflected employees who were 72% less likely to report a decrease in their productivity. Communicating that the layoffs were a necessary step in service to reinforcing the company for a stronger future—and meaning it—will go a long way toward rebuilding the trust of your employees. 

Refocus on the values and purpose that ignited the company in the first place

Remember the purpose and values that ignited the company in the first place. Now is the time to get back to your roots. It’s easy to become distracted from your values and core competencies when growth, expansion, and the busyness of projects and opportunities compete for your time and focus. But using the restructuring process as an opportunity to recommit to your values—the stuff that makes up your company’s core identity and what you are driven by—will reengage your team and drive your organization toward success. 

There will likely be a restructuring of responsibilities, tasks, and workflows following a reorganization. Take the time to really scrutinize where your team is spending their time and how this aligns with your company’s core values and your employee’s personal values. Reframe success and performance within the context of these values. Maintain focus on your mission and how you deliver value to your customers. Getting this alignment right will result in a more productive and engaged workforce and one that is driven and dedicated to your goals and mission.  

Capitalize on the opportunity to embrace and move toward the culture you want to have

Use the layoffs as a catalyst for change. Sometimes the best way to convince your employees that you are serious about creating a healthier culture is to show them. Invest in the employees you want to keep. Not only will this reassure employees that you value their contribution to your organization, but it will also help to reframe what could easily be viewed as a negative, traumatic experience as an exciting career opportunity. Leadership development investments like training and performance coaching will reignite your remaining employees and give them the tools they need to propel your company forward, reinforced and stronger than ever before.

There is ample evidence that investing in your employees leads to increased productivity, retention, and reduced cost to employers. But actually demonstrating that commitment to your workforce following a series of layoffs and staff reductions does double duty. It provides the “walk” to go along with the “talk” of how you are committed to fostering your company culture and adding value to employee growth. And it also results in stronger, more capable, resilient, high-performing employees. 

The decision to terminate employees is a tough one to make. But by uncovering ways to return to your values, committing to transparency in communication, and prioritizing people over profits with new investments in your staff, companies can leverage the positive outcomes while minimizing the damage.

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