The Hidden Costs of Layoffs: How Poor Handling Destroys Trust, Morale, and Productivity

“I think I’m going to lose my job,” a colleague recently said to me. He had been with his company for five years and had strong reviews. Yet, with a single email and a rushed meeting, he was let go. No warning. No support. 

Right now, layoffs are sweeping both the public and private sectors. Federal agencies are cutting jobs, and corporations are downsizing. While job losses may be necessary at times, the way they’re handled often causes unnecessary harm. It impacts those being let go and those who remain.

Creating workplaces where people feel valued and respected shouldn’t disappear when layoffs happen. When we lead with emotional intelligence, we can approach these transitions with care and integrity.

What Companies Get Wrong

We all know the stories of employees finding out about layoffs through mass emails, losing access to their systems before getting the news, or being escorted out by security. When organizations only focus on revenue as the bottom line and miss the impact of human capital, they overlook the high cost of layoffs. Morale tanks, trust is lost, and productivity becomes obsolete.

How to Do It Better

Activate your emotional intelligence capabilities to approach difficult conversations with empathy, awareness, and real leadership. Here’s how:

✅ Transparent Communication – People deserve clear, honest explanations about why layoffs are happening and how decisions are made. Trust comes from transparency and honesty. Share as much information as you can and be honest when you can’t share more. 

✅ Empathetic Delivery – Take the time to meet with those affected. Depending on the number of people, you may not have the bandwidth to meet with everyone individually. Demonstrate your respect for them and their contributions and show genuine care for their well-being.

✅ Emotional Support & Resources – Losing a job is emotional. Companies can provide mental health resources, support groups, or access to counseling to help employees process the transition.

✅ Career Transition Assistance – Help employees move forward by offering resume support, job placement assistance, or even introductions to hiring companies. 

✅ Respect for the Remaining Team – Those who stay often feel survivor’s guilt or worry about their future. Leaders must acknowledge this and recognize that the remaining team will need time to readjust to the losses and their new structure.

The Takeaway

Layoffs will always be difficult, but they don’t have to be dehumanizing. 

📌 If you’re a leader making tough decisions, ask yourself: Are we handling layoffs in a way that minimizes harm and supports employees departing and remaining?

If your organization is navigating layoffs or significant changes, let’s talk about how The Ladipo Group can help create a more supportive, people-centered approach.

Because change is inevitable, but harm doesn’t have to be.

Want more? Check out our Managing Well podcast episode, How to Lead During Layoffs

In the past several weeks, I’ve had conversations with clients overwhelmed and stressed by the constant flurry of executive orders and their impact on their teams, organizations, and personal lives. These are some of the concerns we’ve been hearing:

The Magic of EQ

🛑 Embrace Breaks for Emotional Regulation Being on hyperalert from scrolling or watching the news wreaks havoc on our bodies and minds. Taking breaks is essential for grounding, recentering, and calming your nervous system. Whether walking in nature or listening to calming music, these pauses help you react less and think more clearly.

💪🏾 Seeking Support is Strength Just because people constantly turn to you doesn’t mean you don’t need support, too. Ask your colleagues, manager, friends, partner, or even your kids for help. You can’t be everything to everyone all the time. You deserve a moment to exhale.

💜 Self-Care is Non-Negotiable Double down on the basics. Treat yourself with the same care you’d give a child. Rest when you need to, nourish your body, and create small moments of joy. These seemingly simple actions increase resilience and help you navigate uncertainty with more ease.

Something to think about

What do you do to stay calm during chaos and constant change?

Something to do

Check out the rest of the 8-minute video on How to Lead During Chaos. If you found it useful, like it on YouTube and share it with a friend!

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