Coffee chat with Kim Clark: is there a way to get layoffs right?
Resilience Unfiltered Series
Mass layoffs have become an all-too-familiar reality for many organizations. In times of economic uncertainty and slower growth, they are often viewed as the go-to solution for cutting costs. Is there a way to get layoffs right? More importantly, could they be avoided? In this chat, Kim Clark and I dive into the complexities of layoffs. The goal is to encourage business and communication leaders to consider the full picture and explore alternatives whenever possible.
I am excited to be joined by Kim, a DEI communication strategist based in the San Francisco Bay Area. Known for her ability to facilitate sensitive yet urgent conversations to make meaningful progress in creating inclusive workplaces, Kim is a workshop facilitator, speaker, coach and co-author of The Conscious Communicator: The fine art of not saying stupid sh*t. With decades of experience heading internal communications at PayPal, GitHub, GoDaddy and KLA, she brings a wealth of insight into building organizational resilience in times of change.
Natalia
Layoffs are one of the toughest things for employees to go through and for managers to execute. My first question is atypical for a chat between communicators. Is there a way to avoid layoffs?
Kim
Layoffs are horrible, and could be avoided more often if organizations viewed them as a last resort, not a normalized business practice. Layoffs should be something to avoid at all costs – like a nuclear button. Unfortunately, it gets pressed too easily to achieve short-term gains at the cost of a detrimental organizational experience, with cascades of poorly understood consequences. We chalk it up to, “it’s just business” – strategic restructuring, right-sizing, right-skilling or optimizing operating expenses to enable AI investment. Of course, there are situations where layoffs are unavoidable because what’s at stake is survival. An obvious example is a global pandemic that nobody was prepared to handle. The point I am making is that layoffs should be the absolute last resort, only considered when all other ways to reduce costs and leverage talent have been exhausted.
Natalia
Why do you compare layoffs to a “nuclear button”?
Kim
We need to consider their full human and business impact – and hidden costs – beyond the numbers on a spreadsheet.
According to Korn Ferry, a third of employees fear losing their job before finding a new one, based on a Harris poll. These fears are not unfounded, as 32% of the unemployed have been out of a job for two years or more.
Layoffs breed fear and kill trust, stripping away any sense of security or loyalty. High-performing employees leave. One study found a 41% drop in job satisfaction among layoff survivors, leading to a 36% decline in their desire to stay. Another showed that a 1% workforce layoff resulted in a 31% increase in voluntary turnover.
As morale tanks, so does job performance. Overworked layoff survivors make more mistakes. Product quality declines, and workplace culture deteriorates. Mental health worsens. Remaining employees feel they’re next on the chopping block. People talk. People post things on social. The reputational damage dampens the ability of the organization to hire new talent.
Many layoff decisions disproportionately impact employees with marginalized identities – this is one of the ways in which business recreates the marginalization. Diversity, equity and inclusion (DEI) efforts lose credibility, especially when highly engaged workers volunteering their time for Employee Resource Groups (ERGs) are let go. DEI strategist and author Lily Zheng said it well: “Fundamentally, DEI work is about showing people that they matter by building a workplace where they can thrive.” “Mass layoffs communicate the exact opposite: that no matter a person's skill, experience, productivity, contribution, passion or loyalty, they ultimately are just another cost to be cut.”
Natalia
I am hearing from leaders that it’s anything but business as usual. The future is uncertain. The cost of capital is very different now than it was in 2020. Leaders are under immense pressure from investors. Even with thoughtful staffing decisions, it’s tricky to get the forecasting right when there’s no way of knowing whether today’s trends will hold in two years – or even two months.
Kim
Business does fluctuate – we all know that. In choppy waters, it’s particularly important to think creatively. Staffing up when demand rises, laying off when it dips, and rehiring a few months later is not a sustainable path to building profitable businesses. If you consider the impact of layoffs on culture, workplace trust, psychological safety and employee engagement – all critical for success – layoffs often don’t benefit organizations as much as executives might think. On one side of the scale is the immediate cost-saving; on the other, cascades of longer-term impacts, on top of severance packages, legal fees and productivity losses. Just because you can’t count them on a spreadsheet doesn’t mean they don’t count. Dealing with volatility is about thoughtful change management, not an up-and-down staffing light switch. Resilient organizations adapt to evolving conditions without knee-jerk reactions, good times or bad.
Natalia
Can communicators advocate for better workforce planning earlier in the process?
Kim
Communicators shouldn't only be brought in when it’s time to deliver bad news. We should be driving creative solutions, pushing for transparency, and leading early warning systems to spot problems before they escalate.
In my in-house roles, I have done all kinds of announcements, including many layoffs. One situation comes to mind where a less experienced senior vice president (SVP) really missed his forecast. Big swing and a miss. He was considering a layoff. I said, “Whoa, whoa, whoa. Time out. The areas you are highlighting in your spreadsheet are where you have the highest employee engagement numbers. You have revenue generators and culture champions there. What kind of a trajectory will we be on if you wipe those folks out?”
Our team helped the SVP grasp the impact on the business and explore alternatives, “Where else are you making money that’s doing really well?” “Over here, over here and over here. And we are hiring there.” My advice: “Move the employees marked for a layoff to the area that is growing. Teach them to do the new job. Let the communications we put together for you tell the whole department what’s going on and why. We’ll rally the troops.”
The SVP actually did that, and it fired people up. They felt a sense of accomplishment as a team, with a leader who believed in them and needed them. He appreciated their pride in the company and let them do what they do best. Employees re-fell in love with the organization because we were not hitting that easy layoff button. We kept people and still made a profit.
No one wants to be backed into a corner where layoffs are the only answer. Often, there’s room to make a different call. Ideally, organizations should avoid over-hiring in boom times. If you need to downsize the workforce, layoff alternatives include natural attrition, hiring freezes, and redeploying or upskilling teams to keep up with changing conditions. Reducing executive compensation is another option to save jobs. Boards of directors could also incentivise leaders through contracts and performance metrics to mitigate and avoid layoffs. Bottom of Form
Natalia
Can DEI work play a role in mitigating layoffs?
Kim
Layoffs are often a reactive measure companies take when they are caught off-guard; sometimes, it’s abused as a rhythm of the business. DEI is a strategy for sustainable growth, even in tough times. When embedded in the business, it doesn’t just ensure representation. That’s a very narrow, stereotypical view of it. DEI is a structural advantage powered by wide representation. Fostering diverse perspectives and equitable practices, companies are better equipped to catch early warning signs, anticipate changes and proactively innovate around challenges. DEI principles bring people together as companies navigate through the bumps and improve their chances of staying intact. That’s what I call legit cost savings. And layoffs are expensive – in money, people, customer service, and reputation. They are also a fundamentally unfair practice, especially when you consider that employees are often impacted through no fault of their own.
Natalia
Can you talk more about the impact of layoffs from a DEI perspective?
Kim
Ultimately, DEI is about a workplace where people thrive. At the heart of it is fairness. Layoffs don’t make much sense when organizations talk about being good citizens. Impacted employees have done nothing wrong. Yet, they are the ones who pay the price for something going wrong in the organization – often, through someone else’s fault. If you think about it, this inequity – when good, hard-working people lose their jobs simply because their names appeared on a spreadsheet – is cruel and absurd. However, it’s something we’ve collectively normalized. DEI can mitigate against bad business practices by offering leaders more options and empowering organizations to problem-solve more creatively – strengthening resilience in the long term.
Natalia
One executive compared organizations that resort to layoffs to trapped animals, sometimes forced to chew off their feet to survive. I am thinking about organizations facing existential challenges, such as local news operations in Canada. What’s your advice for communicators in the “before” phase of layoffs viewed as a necessary decision?
Kim
Approach the situation with a change management mindset. Before a change is announced, seed the need for it. Ideally, change management communications should start when the organization still has the ability to alter the trajectory. That’s the time for open conversations about options – rallying, reskilling and exploring different ways to drive the business. If you do change management well, hopefully, you can avoid layoffs.
If they are unavoidable, you are at least setting expectations for what’s ahead. Consider saying early on, “We’re exploring all options, such as option A, with option B possibly being layoffs.” When you ask employees for their input on pivoting and cost-saving, you involve them in the solution. This is very different from a shock situation where they are working their *ss off, reaching burnout and are suddenly laid off.
Natalia
Many employees may still hold on to the hope that layoffs won’t happen – or, at least, won’t happen to them. And companies in crises often lack the time and resources to plan ahead and prepare the team. In my experience, much about layoffs is confidential, with decisions driven by legal teams and a tight group of leaders “in the tent.” Communicators are “brought into the tent” during the execution phase, and employees learn about layoffs after the fact. Are there ways to increase transparency?
Kim
Of course, no one wants to get into legal hot water or premature leaks during complex layoff announcements. Communicators must work closely with both HR and legal teams to make sure their messaging and tactics comply with employment laws, with confidentiality agreements in place where necessary. However, if we are talking about best practices, communicators need to be “in the tent” early on and advocate against behaviours that erode trust and psychological safety.
We should work with leaders to tell the whole story even when we are not getting it ourselves because what’s talked about in all-company meetings is often surface-level. Have business acumen. Listen to the earnings reports if we are a publicly traded company. Pay attention to the numbers. Watch hiring trends. Know the engagement numbers. Have a pulse. Read the room and the crystal ball.
Too often, there’s a lot of investment in new launches. Everyone is so excited. We do employee communications to support the launch and never talk about it again, chasing one shiny thing after another. And then, bah! Layoff. Because one of the launches tanked. We weren’t paying attention. There was no psychological safety for teams to speak up. Maybe the company divested too much away from testing or other areas of the business with devastating impact. That is the worst kind of a ‘say – do gap.’ Here are some ways to mitigate it:
Make transparency part of culture. You don’t turn it on and off. Provide regular updates on the vision, financials for all lines of business and challenges. Not just in a crisis. Month after month. Quarter after quarter. No sugar-coating. We hired adults. Let’s treat them as such. The more they know, the more they can help problem-solve.
Follow up on launches. Talk about product or service adoption. Six, nine, twelve months after the launch. What did we learn? Where are the fails? Talk openly about customer feedback. Let employees learn and build their own business acumen.
Encourage frontline feedback. Hear from frontline employees if something is on track to go sideways. Reward employees for bringing up red flags. Involve them in decisions before they are baked. One SVP can’t possibly have all the answers. Psychological safety builds trust in the leadership. Big time.
There is no way to sweeten the pill if layoffs need to happen, but they should not come as a surprise. Ever.
Natalia
There are many examples of layoffs not handled well. Can you think of companies that got them “right”?
Kim
There’s positive feedback on the December 2023 Spotify announcement about laying off 17% of their workforce. Leaders owned it. They explained the “why” in the context of their vision. They showed respect to the leaving employees, recognizing their contributions. They acknowledged the pain and anxiety that come with this kind of change. They also provided solid details on healthy severance and health care packages, and included special provisions for those on work visas.
Natalia
What are the lessons for communicators involved in executing a layoff?
Kim
One big mistake is bringing in managers after the fact. They are the go-to for employees during tough times, and if they are left scrambling to address questions without clear guidance, it leads to confusion, frustration and a sense of betrayal. Training managers with the right messaging upfront – both on the business context and the human impact – organizations set them up to actually support their teams when layoffs are announced. There should be a smart, well-timed plan. Sure, you’ve got legal stuff to consider, but you’ve also got to focus on building trust. It nosedives when layoffs are dropped on employees out of the blue and managers had no say.
Natalia
What should communicators keep in mind when it comes to choosing the right channel, timing and tone?
Kim
Some organizations announce layoffs in an open letter to all staff after briefing managers. Employees who are leaving are then invited to one-on-one meetings with HR. Internal announcements should be synchronized with external. The open letter (or something similar) can be posted on the company website. Whatever channel you choose, the announcement should not be buried – for example, in a weekly newsletter.
Skip the fluff and get to the point. Call it what it is. No euphemisms. For example, the subject line could say: “Reducing our workforce by 10%.”
Be honest. Provide a clear reason for what you are doing. It’s not helpful to blame everything on the economy and external factors. Leaders should acknowledge their role in navigating the challenges, talk about what they’ve done after they realized there was a problem and what they are going to do differently to avoid layoffs in the future.
Keep the language clear and inclusive – avoid business jargon so the message is not lost on the employees who do not speak English as their first language.
Keep the tone warm. This is not the time to sound like the reality TV version of Trump in The Apprentice saying, “You’re fired.” Show empathy and respect for both those leaving and those staying. Express genuine appreciation for the colleagues directly impacted by the layoff and their contributions.
Remember: it’s not about how hard it is for leaders, especially when they are not taking any kind of a hit financially. Comments like “this is tough for me, too” or a CEO crying on Zoom aren’t helpful (and yes, that has happened).
Assume everything you say internally will be shared externally. What you communicate in writing will end up on social media, likely with commentary. The media will be watching, and they’ll keep an eye on anything you are legally required to disclose to the government or in your earnings reports.
Natalia
Getting laid off is traumatic. How can leaders handle this with more compassion and care?
Kim
To understand the human response, look at the Kübler-Ross Change Curve and Grief Cycle side by the side. They are very similar. Quick note for our readers unfamiliar with these models. They come from a Swiss psychiatrist Dr. Elisabeth Kübler-Ross. The Change Curve shows the stages individuals and organizations go through during change: shock and denial, anger and fear, acceptance and, finally, commitment. The first reaction in the Change Curve and in the Kübler-Ross's five-stage grieving process is the same. Shock and denial.
Employees are going to flinch. Layoffs can bring up past trauma, personal or professional. A sense of abandonment. Abuse. Vulnerability. People are not going to feel like they are enough. A layoff can shake someone’s confidence. Without support, therapy or counseling, they may carry that baggage into their next job. There’s a lot of healing that needs to happen.
Natalia
This is where we need to talk about the “after” of layoffs. What should communicators keep in mind?
Kim
This could be one of many rounds of layoffs if business does not improve. Some companies build trust during high-revenue years. Then, it’s wiped away by multiple rounds of layoffs in a short period of time. Employees are waiting for another shoe to drop – and looking for a new job. You have to rebuild trust and morale:
Keep communication open. Address questions. Make sure leaders are visible and employees are heard. Create a space for them to process what’s happened.
Share a clear vision. Explain the company’s future direction and the opportunities it creates for the team. Keep employees in the loop about what’s being done to avoid future layoffs. Invite their feedback.
Rebuild culture. Foster employee engagement through listening tours, check-ins, pulse checks, town halls and team-building activities. If leaders have said, “we’re a family here,” stop.
Stay honest. Keep a close eye on product performance, customer feedback and hiring trends. Be transparent in communicating business updates. Invest in psychological safety so concerns from the front lines are heard.
Show employees they matter. Focus on the well-being and development of those who remain. Don’t burn bridges with laid-off staff – they might be future customers or even come back as boomerang employees.
Invest in DEI. Take this work very seriously. DEI isn’t just a checkbox – it’s a strategic advantage when embedded in the business in a meaningful way.
Natalia
I appreciate the depth and candidness of this conversation. Any final words?
Kim
Layoffs tend to happen at the end of the year, and we’re coming up on Q4. There are companies out there that make the cuts right before the holidays. I think this conversation is very timely. Thank you for having it and thank you for having it with me.
Kim Clark (she/her), Diversity, Equity and Inclusion (DEI) communications speaker, coach, consultant
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Kim focuses on the communicator’s role in diversity, equity and inclusion (DEI) efforts. She is leading the work to help organizations build trust in leadership, employee engagement, and customer reputation through DEI communications and processes.
Kim is the co-author of The Conscious Communicator: The fine art of not saying stupid sh*t, an Amazon #1 bestseller, which features The DEPTH Model. Her career includes leading global internal communication teams at KLA, PayPal, GoDaddy and GitHub, documentary filmmaking with the Discovery Channel, and 20+ years teaching at San Jose State University.
Natalia Smalyuk, award-winning advisor and trainer with a focus on strategic communication, crisis resilience and stakeholder engagement.
Natalia runs a Women Business Enterprise (WBE) certified communication consultancy called NBAU. What is NBAU? Not Business as Usual. Why NBAU? Because there’s no such thing as business as usual for leaders who think ahead and see a landscape of opportunity — and risk — across the unchartered global space.
NBAU supports organizations in building resilience before, during and after adverse events with a unique crisis planning and training model that broadens the understanding of crises and enables positive action in an uncertain world.