Empathy in Layoffs: Essential for Business Reputation and Employee Wellbeing

In uncertain economic times, layoffs are sometimes unavoidable. But how you handle them matters profoundly—not only to the employees who are let go but to the rest of your workforce, your brand, and your bottom line. It wouldn’t be wrong to state that organizations should make empathy a central focus while hiring and laying off employees. In this blog, we’ll explore the importance of practicing empathy during layoffs.

Importance of Empathy for Businesses

Layoffs are difficult for everyone involved. For the employees being let go, it’s a life-altering event. For the remaining employees, it can shake morale and erode trust in leadership. And for leaders themselves, it’s emotionally taxing, often weighing on their conscience for weeks, if not months. That’s why empathy is crucial when conducting layoffs because it also affects the company's reputation. So, firing people should be done in a structured process and handled well with compassion and to maintain the dignity of the individual being laid off.  

A popular beauty and wellness company recently faced backlash for deciding to lay off employees who admitted to being under stress in a company-held survey. This decision to terminate employees based on the survey responses in an email was considered unprofessional. Instead of showing empathy and enhancing their employee engagement and wellbeing program, the company handled the layoffs without any sensitivity.

In another example, a leading global tech giant showed empathy in its layoff procedures during the pandemic by offering affected employees a comprehensive severance package. For employees who were impacted, the company provided four months’ pay, healthcare coverage for a full year, and assistance finding new roles within the company. Additionally, it gave employees the option to access job placement support, including connections to recruiters and companies within the company’s vast network. Their approach was seen as a strong demonstration of commitment to the employees’ futures, even when they could no longer remain at the company.

For small and medium-sized businesses, the culture is built on trust and interpersonal communication. How you handle the layoffs also affects the remaining employees at your company. Both positive and negative feedback can circulate quickly and impact how your company may be perceived in the industry. Firing your employees over a call, email, or message is also considered cold, impersonal, and harsh. It is always wise to keep transparent communication during layoffs and help employees throughout the process in handling their questions and concerns they may have regarding the decision.

Conclusion

Empathy means understanding and sharing the feelings of others. It’s about recognizing the profound personal impact layoffs can have, especially when employees have dedicated years of their lives to the company. When executed poorly, layoffs can feel impersonal, cold, or even punitive. Employees may feel like numbers, not people. But when approached with empathy, layoffs can be a moment of respect, transparency, and support, allowing employees to leave with dignity and hope for the future.

In the next blog, we will discuss some effective strategies to conduct layoffs with compassion.