The Do’s and Don’ts of Announcing Layoffs with Compassion

One of the most challenging responsibilities for an HR professional or business leader is handling employee terminations. In a country like India, where the family's well-being depends on job security, layoff cases can impact the workers' immediate life spheres. However, economic pressures, organizational restructuring, or technological shifts can sometimes leave no alternative but to reduce the workforce.

How a company communicates layoffs plays a crucial role. When done with care, it does lay a path to trust; fewer litigations arise, and the life of organizational credibility continues. When handled poorly, terminations can cause reputational damage. In the worst-case scenario, they may lead to legal disputes and long-term disengagement across the remaining workforce.

This blog discusses how HR professionals can communicate layoffs with empathy, compliance, and clarity, preserving dignity while safeguarding organizational integrity.

Understand the Emotional Impact Before You Communicate

Empathy and transparency in communication are extremely significant in digitally connected sectors like IT, EdTech, or Fintech, where employees often go public with their experiences. Poor communication is bound to cause reputational damage and disengagement from within. On the other hand, for small companies and startups where teams work closely together, an impersonal or unthoughtful approach to layoffs is enough to undermine morale and teamwork.

Dos: How to Announce Layoffs With Compassion

1. Plan the Message with HR and Legal Teams
   

   • Draft a clear script that avoids jargon and is legally sound.

   • Equip managers and leaders with the correct information and support ahead of layoffs to ensure they communicate consistently, clearly, and empathetically.
     

2. Be Honest but Sensitive
   

   • Explain the real reasons for the layoff: economic pressures, restructuring, and automation, without blaming any individual.

   • Keep the message short and empathetic while acknowledging the contributions of the people being let go.
     

3. Choose the Right Setting
   

   • Layoff communication should remain private, ideally considered a face-to-face or video conversation.

   • Do not send a cold email or bulk message. It is impersonal and can be traumatic.
     

4. Offer Support Mechanisms
   

   • Share details of severance, final settlement timelines, continuation of health benefits, and exit formalities.

   • Where feasible, provide access to resume-building workshops, job referrals, or outplacement support.

   • Increasingly, large IT companies in India are taking on the responsibility of assisting transitioned employees by collaborating with job portals or skilling platforms.
     

5. Communicate with the Remaining Team
   

   • Try alleviating feelings of fear, confusion, or guilt by retained employees, often called "survivor syndrome.

   • Encourage teams to be clear in communicating what lies ahead and what the organization's future plans are.
     

6. Document Everything
   

   • Document every communication channel, including acknowledgments, exit interviews, settlement agreements, etc. 

   • Such documentation is necessary to ensure compliance with labor laws and can be held as evidence in further disputes.

Don’ts: What to Avoid When Delivering Layoffs

1. Never Announce Without Preparation
   

   • An impromptu proclamation creates confusion and panic.

   • Managers should have a clear communication guide to implement when addressing their teams.
     

2. Avoid Being Vague or Hiding Details
   

   • Avoid using vague terms like "realignment" or "resource optimization" without explaining their meaning.

   • Building trust becomes more difficult when not transparent, especially in complex situations.
     

3. Refrain from Blaming or Shaming Individuals
   

   • Never make it sound as if the person had done something wrong.

   • Layoffs are about roles, not the individual's performance (unless it is performance-based termination, which is another situation).
     

4. Avoid Final Settlement Delays
   

   • Delayed full and final settlement creates financial hardship and destroys trust. 

   • According to the Ministry of Labour & Employment, under the Payment of Wages Act, all dues must be paid within two working days of termination.
     

5. Never Let Social Media Be the First to Know
   

   • Internal communication should precede any public announcement.

   • Several startups in the country have been criticized for their employees' discovery of layoffs through LinkedIn posts or press leaks.
     

6. Avoid Ignoring Legal Compliance
   

   • Layoffs must comply with labor laws. For example, any company with more than 100 employees must get prior permission from the government under the Industrial Disputes Act, 1947.

   • If overlooked, it can lead to financial losses, legal action, and significant damage to the organization’s reputation.

Handle Layoffs with Dignity, Not Just Policy

Apart from being difficult, layoffs must be treated with dignity, honesty, and care. This aspect becomes more critical in companies, where sometimes the employer-employee relationship runs deeper than in Western cultures. HR leaders can protect their people and their company's fortunes by doing the right things and refraining from doing the wrong.

By preparing in advance, following the correct process, and treating each employee respectfully, HR leaders can uphold the organization’s values even during the most challenging decisions.