With Tech-Giants Practicing Mass Lay Offs and many following Suit, Here are Some Lay Off Process Tips to Put the ‘human’ in human resources

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A layoff, or a redundancy or downsizing, refers to an employer’s temporary or permanent termination of employment for one or more employees. It is a process where employees get separated from their positions due to factors beyond the organization’s control. Layoffs are one of the toughest and most sensitive issues; however, they are unavoidable during economic downturns, restructuring, mergers, acquisitions, technological changes, or a need to cut costs. Layoffs are confused with other terms, such as termination and dismissal, but these happen when employees underperform, violate certain company policies, or any other related reason concerning job performance.

In 2023, a nuanced trend emerged as 56 percent of organizations experienced a dip or stagnation in hiring.

According to the report by Mercer Mettl, this shift indicates a recalibration in recruitment strategies influenced by factors like evolving market conditions, technological disruptions, and the ongoing global economic pulse.

Another article published in Bloomberg by Benhamou, Haque, Kuntz, and Contantz (2023) stated that 2023 was the worst year for layoffs since 2009.

The image below explains layoffs announced across different sectors and layoffs announced with several jobs or workforce share.

Note: Data comprises layoffs announced with several jobs or share of workforce cut from 1st Oct, 2022 to 20th March,  2023 at 12pm EDT. Layoff data aggregated weekly ending on Sundays.
Source: Data compiled by Bloomberg

According to Moneycontrol News (2024), it was reported that globally, over 32% of the companies announced layoffs in which IT services stand first.

According to the intellizence, some global companies that announced layoffs in 2023 are shown in the image below;

Layoff, as mentioned, is a very sensitive issue, and if not handled right, it can impact the organization’s brand image because layoffs affect multiple employees at once and are generally applicable for mass employees. In most cases, mass layoffs happen suddenly, which often adds an extra layer of complexity and challenge to the situation;

Immediate decisions: A mass layoff is made abruptly, possibly due to a sudden financial crisis, unexpected market changes, or unforeseen challenges that demand immediate action

Limited planning time: Due to less time, organizations fail to develop comprehensive strategies, communicate effectively, and provide adequate support services for affected employees.

Minimal Employee Input: When layoff decisions are sudden, employees may have limited opportunities for their input or consultations.

Legal and regulatory challenges: Sudden layoffs could pose challenges in ensuring full compliance with legal and regulatory requirements; thus, it is important to work closely with legal advisors to navigate the legal landscape as effectively as possible.

Emotional Impact: Layoffs can intensify the emotional impact on employees. Anxiety, shock, and uncertainty may be heightened due to the lack of preparation time and the suddenness of the decision.

Employee Morale and retention concerns: Layoff can create concerns about job security and the organization’s stability among the remaining workforce. Companies may need to address these concerns promptly to maintain morale and retain key talent.

After the layoffs, the organization thoroughly reviews the process to identify what worked well and areas that could be improved.

Lessons learned from the sudden layoff scenario can inform future workforce planning and crisis management strategies.

Some of the simple Do’s and Don’ts organizations can follow during layoffs are;

Suppose organizations do not go through the right process during layoffs. In that case, it can face legal charges due to layoffs if there is wrongful termination like unjust reasons, discrimination layoff in terms of gender, age, disability, breach of employment contract, violation of labor laws, violation of WARN act during mass layoffs and severance agreement disputes.

Few companies which faced lawsuits during layoffs are Yellow Corp over failure to notify employees regarding layoffs, Nextbite and Ordermark alleging that they violated Worker Adjustment and Retraining Notification Act (WARN Act), even Convoy faced lawsuit for the same reason.

According to Strongittharm (2022), there are a few things organizations need to follow during mass layoffs, which are explained below;

Another article by Duncan (2023) in jobsage suggested few other aspects the companies can do while announcing mass layoffs are;

To conclude, it is unfortunate for any organization to lay off employees; the individual responsible for the decision should recognize the inherent difficulty in such circumstances. While it is necessary to maintain the viability of the business, it is essential to acknowledge that those laid off are not mere financial considerations but individuals with families and responsibilities. Following the recommended steps won’t alleviate the challenges of laying off employees, but it can make the process more bearable for everyone involved.

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