How to Navigate Corporate Layoffs and Restructuring

I saw a post yesterday where someone found out they were being laid off when they got logged out of a system in the middle of a presentation. And another where the person's badge simply didn't work when they showed up at work that day. I think most people understand why layoffs are necessary. We may not like them, but we get it. We know that sometimes you need to cut expenses or you simply have a change in the skills needed, and we know that if you are the owner of the business, your job is to make hard decisions even if we don't always agree with them. But what I struggle with is the callousness with which layoffs are conducted. Layoffs can be done with care and humanity and it's a choice many are making not to do it that way. Some steps I would take if I were an executive navigating layoffs: 1. I would let my employees know they were a possibility as soon as the discussion began so they could explore new opportunities. 2. I would provide as many details as I could. Share potential numbers, which departments might be impacted, criteria being considered for who might be impacted. That way, people could assess their personal risk level and act accordingly. 3. I would make sure every employee got a human touch point talking through the layoff decision. No one should find out they are being let go because their email stop working one day. 4. I would provide strong financial support. Provide a severance package that accounts for the fact that many corporate job searches take 6+ months, and that unemployment covers just a fraction of lost wages. 5. I would support them with their next steps. Give them time to gather artifacts around their work, talk through what you'll share in references, offer introductions in your networks to help them land on their feet, provide job search assistance. And I would speak positively of the laid off employees externally to ensure that I'm not unintentionally making their job search tougher on them, The pushback I hear to many of these ideas is around risk. Risk that your top performers might leave when they hear about the layoffs. Risk that employees may be less engaged and motivated if they hear that layoffs are coming. Risk that employees may cause harm if they fear being laid off. From my perspective, that's just a risk executives should take. Your employees took a risk trusting you with their career; why shouldn't that risk be shared? But I also believe that a lot of the adversarial dynamics in the workplace stem from the lack of humanity. And if you treat your employees like humans who matter to the business, and you offer them transparency and respect, they'll offer that in return. Nothing is going to make a layoff feel good. But that doesn't mean they need to be cruel.

The real layoff mistake isn’t in how you fire. It’s in how you hire. In hypergrowth, hiring fast often feels like the only option. More customers. More pressure. More money in the bank. So the instinct is: “Let’s scale the team.” But what if that instinct is the beginning of the unraveling? I have been inside startups that scale from 20 to 250 slowly bleeding people out.. Layoffs didn’t start with an all-hands. They started quietly: → A hiring freeze. → Then Slack profiles going dark. → Fridays filled with founder exit calls. And here’s what’s rarely talked about: It’s not just the ones who leave who are impacted. It’s the ones who stay. They’re left with fear, uncertainty, survivor’s guilt. They ask: Am I next? Does this company still need me? Should I start looking? The silence is what breaks them, not the news itself. Layoffs aren’t just financial decisions. They’re emotional, strategic, and deeply human. And many founders, understandably, get them wrong. Here are 6 lessons I’ve learned the hard way: 1. Don’t wait until the cash runs out. If you're two payrolls from red, it’s already too late. Scenario-plan months ahead, just like you would with growth. 2. Call it what it is. Trying to “quietly downsize” erodes trust. Your team deserves honesty and clarity, not euphemisms. 3. Budget for the full cost. Severance. PTO. Benefits extensions. Legal. If you haven’t planned for it financially, you’re in for a messy ride 4. Speak like a human. Forget legal scripts and mass emails. People will remember how they were treated when things got hard. This is your legacy. 5. Support the ones who stay. They’re watching closely. They need context, reassurance, and direction. Rebuilding trust starts the moment the call ends. 6. Don’t treat layoffs like a single event. Layoffs are a process, not a moment. Your team needs you to keep showing up, especially after the dust settles. If you’re staring down hard decisions right now: ✅ Run the numbers early ✅ Build a holistic layoff plan (finance + ops + people) ✅ Communicate with clarity and care ✅ Lead through the after, not just the moment You can’t avoid every tough call. But you can lead through it with integrity. That’s the kind of founder teams want to stay with, even when things get hard. Are you hiring with intention, or just following the fundraising high?

In December 2024 alone, approximately 1.8 million U.S. employees were laid off or discharged, contributing to a staggering total of over 20 million layoffs throughout the year. I've led teams through downturns, layoffs, and heartbreak. Here’s what leaders must know to protect their people and culture. As a leadership coach, I've guided senior executives through painful workforce reductions at Fortune 500 firms, high-growth startups, and family-owned businesses. Here’s what top leaders know (and do) that others don't: 1️⃣ Communicate with Radical Transparency Leaders often hide behind vague, corporate language during layoffs. But the truth is: Employees crave honesty—even when it hurts. Don’t sugarcoat the truth. Explain clearly why layoffs are happening, criteria used, and your plan moving forward. 2️⃣ Lead With Empathy (Not Just Efficiency) Leaders are conditioned to prioritize speed and efficiency during layoffs. But cold efficiency without empathy destroys trust permanently. When Better CEO laid off 900 employees abruptly over Zoom, the backlash was catastrophic. Employee morale collapsed; Glassdoor ratings plunged. 3️⃣ Double Down on Psychological Safety Layoffs shatter psychological safety instantly, damaging performance among those who remain. According to Harvard Business Review, "survivors" of layoffs experience a 41% drop in productivity if psychological safety isn't deliberately rebuilt. 4️⃣ Your Culture Will Be Remembered (for Better or Worse) How you handle layoffs becomes a defining cultural moment. Recognize layoffs as a culture-defining event. Your actions—fairness, compassion, generosity—are under a microscope. Invest resources to support exiting employees, and your future employees will notice. 5️⃣ Leaders Go First (In Everything) Leaders must absorb pain before employees do. Marriott Hotels CEO Arne Sorenson famously announced during COVID layoffs he’d take no salary to protect more employees. This sacrifice became a powerful leadership example, motivating his team during a difficult recovery. 6️⃣ Prioritize Future Talent & Brand Reputation Layoffs don't end when employees leave—they ripple through your brand for years. Glassdoor found 84% of job seekers consider an employer’s layoff history when applying. Quick Leadership Checklist During Layoffs: ✅ Honesty: Radical transparency wins trust. ✅ Empathy: Lead with humanity—always. ✅ Psychological Safety: Rebuild trust quickly. ✅ Culture: Your actions define you forever. ✅ Sacrifice: Leaders absorb pain first. ✅ Future-Focused: Protect employer reputation fiercely. How are you protecting your people and your culture during tough times? I'd love to hear your thoughts. #Leadership #Layoffs #ExecutiveLeadership

Ever notice how restructuring announcements always promise "flatter organizations" and "faster decision-making," but rarely talk about what happens to all those managers who lose their positions? Most companies handle this in one of two ways: 1. Mass layoffs (hurting morale and removing institutional knowledge) 2. Awkward demotions (creating resentment and disengagement) But in my latest conversation with Connie Klimko from Siemens Energy on The Only Constant, I discovered a third path that's so much smarter. When they flattened their organization by removing several management layers, they simultaneously elevated the "expert career path" as an equally valuable way to advance. This isn't just a consolation prize. It's a recognition that technical expertise and influence can be just as valuable as people management - and often more aligned with what people actually enjoy doing. As Connie mentioned, it's ironic that "often when someone is good at their job, they're put in a role of managing people, which is a whole different skillset." What I really love about Siemens Energy's approach is how they built trust during this massive change: - They opened ALL management positions to transparent hiring - Created special resources specifically for managers - Had teams literally shadow each other and even swap roles - Used change ambassadors to monitor how people were coping The result? Out of hundreds of managers affected by the restructuring, fewer than 20 people left the company. That's incredible retention during such a significant change. I think Connie's final advice is spot on: while structures and processes may constantly change, your company's purpose and values should remain constant. That consistency gives people an anchor during stormy seas of transformation. Listen to our full conversation by clicking the links to Spotify and Apple Podcasts in the comment section below 👇 Has your organization gone through restructuring recently? What worked well or what would you have done differently?