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How to effectively communicate company downsizing

Learn how to communicate company downsizing, and what to do next.

Downsizing is difficult for a company, and laying off employees is a complex and challenging task. Departing employees experience myriad emotions, such as anger, sadness and fear. The remaining employees also have concerns about increased workloads and their own fates.

Effective communication is crucial during reductions in force (RIFs). The process will be smoother with preparation and consideration of your essential messaging. Being transparent and communicating appropriately will also reflect positively on our brand, even though you are letting people go.

To help you navigate through this difficult but not uncommon occurrence, we’ve put together some key considerations and advice for how to communicate downsizing to employees.

Before you start to communicate with employees, it’s necessary to create a communication plan with thoughtful, transparent, consistent communications from the CEO. It’s important to be clear when you present your message to employees. Your communications may also be made public, so prepare emails, FAQs and a media statement in advance. Above all, your message should be transparent and honest.

Uncertainty can lead to anxiety and disengaged employees. By being transparent and providing information as soon as possible, you’ll avoid issues like rumours starting. Transparency also prevents your company from losing the trust of the remaining employees. It will be difficult to prevent news about lay-offs from spreading, due to the prevalence of social media, so make sure your strategy is to execute the communication plan quickly and efficiently, starting with the affected employees.

All communication with both affected and retained employees should be open and honest about why lay-offs are happening. Be open about why RIF is necessary and share what other options were considered, implemented or rejected. If you’ve been transparent with your employees all along, they will be less surprised by the news and more receptive to your communication.

Whenever possible, deliver lay-off messages to affected employees in one-to-one meetings with a manager who they trust. Allocate enough time to help them process the information, but keep the meetings short enough to prevent discussions and rumours from circulating as laid-off employees communicate with colleagues. Employees often have questions to ask when a company is downsizing. Offer a way for them to communicate with management after the meeting since they may have more questions after they’ve had time to process the news.

For remote or hybrid employees who are not in the office, hold video conferences to deliver the news face-to-face. Even though they are not on-site, they deserve the same opportunity to hear the news from a trusted manager in a respectful way.

Be compassionate and provide clear, direct information to those employees whose jobs will be affected. Although you may feel stressed, striking the right tone that reflects your compassion is important. Let these employees know what kind of severance package or benefits they should expect and what support will be provided to them. Show empathy and avoid corporate jargon. 

Remember that your existing employees will be watching how you handle the situation. After the lay-offs, you’ll need them to have a positive mindset, and seeing your compassion for their former colleagues will help.

Your communication with remaining employees will have a significant impact on future employee satisfaction. You should be prepared to deal with a rollercoaster of emotions as these individuals process the downsizing and the implications for their own roles and responsibilities.

Those who weren’t let go may experience Lay-Off Survivor Guilt, which can lead to decreased productivity and morale. Reassure your remaining employees that their jobs are safe, and prepare to deal with changes in company culture and employee engagement.

Management needs to step forward to explain the reasons behind the downsizing and the company’s plan moving forward. This will help restore confidence in the organisation and reassure employees that the company will continue to operate smoothly. 

The following steps will help you communicate with employees to decrease anxiety and move forward after downsizing:

  1. Hold meetings: Transparency is vital at this point. Whether you choose to address all of the employees at once or in smaller groups, they need to understand the downsizing rationale and the plan for your company’s future.
  2. Explain the lay-offs: Address why the downsizing had to occur, how many employees were affected, how lay-off decisions were made, benefits provided to affected employees and how the company will move forward. Providing this information will prevent fear of the unknown and ease some of the anxiety they may be feeling.
  3. Answer questions: Employees often have questions to ask when a company is downsizing. Address questions with compassionate answers. Emotions will probably be running high after lay-offs. Be prepared to address questions about the whole company as well as teams.
  4. Address roles and responsibilities: Lay-offs generally result in a reallocation of duties. Your remaining employees will need clarification about changes in reporting structures, workloads, and evolving expectations.
  5. Ongoing review of workloads: Let your remaining employees know that their managers will monitor their workloads and are open to discussions about how to adjust to new tasks and responsibilities.
  6. Explain how the company will move forward: Share the positives you expect to see as a result of these changes in the workforce. This helps employees feel that they are working with you towards a common goal.
  7. Establish a communication hub: Whether you use your company intranet, Slack channels or something else, designate a primary place for important company news. Let employees know about it and post to it consistently.

Don’t forget that listening is key in communication. While you want to get your message across, you also need to listen to your employees' fears and concerns. You have a message to deliver, but listening to your employees’ responses, acknowledging their emotions and replying with empathy will benefit the employees, the managers and the company.

As we mentioned, you should expect your communications to be made public. Part of your communication plan should include a media statement for external stakeholders. It’s important that news sources and clients hear about the company downsizing from you first so that you can control the narrative. This should happen shortly after your internal downsizing communications.

External stakeholders will often have many questions when a company is downsizing. Communication with external stakeholders should contextualise and accurately relate the rationale for the downsizing in order to reduce the number of questions they may have. Include the steps you’re taking to support the affected employees, including severance, resources offered to help with future employment and other types of support offered by your organisation. 

Reassure clients and stakeholders that their services will not be affected by your downsizing. Let them know that internal restructuring is occurring and that they will be kept informed of any changes in the teams they normally work with.

Be aware that the media will be watching and while you can’t control what they say, your consistent message to all employees and stakeholders will help prevent the story from spiralling. 

Clear, transparent and effective communication is critical during downsizing. Creating a communication plan that allows you to quickly proceed through the process is critical. Transparent communication is the best way to prevent downsizing from tarnishing your brand.

Follow up shortly after the downsizing by conducting an employee satisfaction survey with your remaining employees. Use the collected data to make informed decisions about improving company culture, workplace changes and encouragement for remaining employees.
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