The Uncomfortable Inevitability of Layoffs

A simple Google search highlights the inevitability of layoffs in America. Layoffs at major newspapers and digital media outlets are down after being up, and layoffs in tech are up after being down. The ups and downs—often with a few short years or even months in between—continue in industry after industry and at company after company.

Recent Layoffs

Recently, we’ve seen Amazon lay off thousands of workers and Meta lay off 13% of its workforce. And this inevitability isn’t reserved for corporate America’s giants; In September, 10% of small business owners let go of staff, up significantly from 4% just two months earlier.

With so many potential triggers to force a company’s hand, from external factors such as new regulations or a recession, to internal factors like cost-cutting or a merger, layoffs are virtually unavoidable over the course of a business’ lifetime. The companies most often susceptible to layoffs are mature organizations, because with their age naturally comes more triggers.

Amazon’s troubles, which could lead to the forced exit of 10,000 workers by 2023, started with sub-par third quarter earnings, along with underperforming business units. Understandably, the possibility of an imminent recession has only exacerbated their fears.

Uncomfortable Feelings

Today, perhaps more than ever, companies are increasingly sensitive to their former employees’ needs after layoffs. Among many leaders in the C-Suite, there seems to be a growing amount of sympathy and support—an acknowledgement that people’s well-being depends so much upon their work and the benefits which accompany it.

Amazon CEO Andy Jassy recently wrote the following to Amazon employees: “I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic). It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”

Jassy’s comments seem genuine and without pretense, more heartfelt and personal than cold and crafted. And oftentimes, these types of comments become action. For years, many companies which have experienced layoffs have offered some degree of outplacement services to support individuals with transitions. In fact, according to a 2021 study, approximately 44% of American and Canadian companies offer outplacement services, up 13% since 2018.

Of course, it’s those individuals who were laid off which experience the most discomfort, wondering what now, what next, and what if it happens again. While it can be a demoralizing feeling, it can also be a feeling of opportunity, particularly when taking advantage of outplacement services. A layoff, in an unexpected way, can become a catalyst for skill development and even finding a more promising career path.

At the most macro level, a layoff can affect morale across an entire company. No one is immune to its effects, including “survivors” who retain job security. Once the layoff dust has settled, remaining employee commitment, morale, and satisfaction can collapse, presenting a major challenge for company leadership. While there’s no silver bullet, companies can encourage morale by being honest, communicating openly, offering reassurance about the company’s future, and empathetically taking care—as much as possible—of people who were let go.

The Complexities

Layoffs are as uncomfortable as they are inevitable. It’s a simple statement. It’s also a stern reminder that, as business leaders, you must remember this and be prepared for the complexities when the time comes. Speaking of layoff complexities, they come in many shapes and sizes, from communication and public relations to compliance and legal.

In part two of this blog series, we’ll take a look at the biggest complexities and touch on how to simplify them, so stay tuned.