Layoffs are common in businesses that undergo restructuring. Generally, restructuring will need a pile of money that results in a financial crisis for business. Thus, the company needs to downsize its operation by cutting off some jobs.
For example, an American multinational transportation network, Uber laid off 435 workers in its product and engineering teams earlier this week. This is the second round of job cuts, the reporter wrote, with the first cut was commenced in July and affecting 400 workers. The reason for such massive employee redundancy is because Uber has been struggling to make profits in the last few months.
The hard truth about a layoff
Laying off employees can be sad and daunting for employers. Not only for those affected by the cutback, but the remaining employees might also experience discomfort due to bereavement. Besides, massive job cuts can hamper company’s performance and productivity when not handled well.
Let’s learn from the worst layoff of Nokia company. Nokia was forced to lay off employees since moving from Bochum operations to Romania, where labour costs are lower. The layoff didn’t go into effect until June 30. Around 2008, 15.000 people protested at Bochum, Germany due to Nokia’s factory closing. The shutdown cost Nokia €200 million – more than €80,000 per laid-off employee. The firm’s market share in Germany plunged; company managers estimated that from 2008 to 2010, Nokia lost €700 million in sales and €100 million in profits due to massive layoffs.
Of course, you would not want such turmoil to happen in your company when you are planning to restructure the business. Thus, here are two better solutions to manage a layoff without inviting so much chaos.
1. Create structured layoff
Having a safe and smooth layoff does not come easy. You need to first think of a better-structured strategy that would impact well from the beginning to the end. To create a structured strategy, follow these steps.
- Take decision – You need to find a convenient time to tell your people that they will no longer be required to work for the company. Two to three weeks before the layoff would be perfect as employees can use the time to find another job.
- Give reasons – Your decision should come with professional and rational reasons. Be honest about the condition that leads to the decision and make it clear to the employees.
- Listen – This is an important process in your strategy. Listen to employee’s feedback regarding the layoff and react professionally. Don’t react in a way that will invite brawl. Ideally, HR representative should be involved as a third-party.
- Provide help – Lastly, you should add a helpful strategy to your employees. Training and helping them to transition between jobs is a good idea. You can work together with your human resource management for this step.
2. Leader involvement
While the structured strategy can muffle the situation, leaders should take action and help the situation. Leaders can provide coaching to the manager and assist them in delivering emotional news. Besides, leaders have a powerful influence to minimise the negative effect of unpleasant information when he is willing to personally deliver a statement to manager and employees regarding the issue. At last, a leader can provide a written statement about the problem to be informed to employees.