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Between December 2007, the official start of the current recession, and June 2009 more than 40,000 U.S. organizations held layoffs in an effort to reduce costs, increase profits, and improve shareholder value. Ironically, research over past the twenty years indicates that most layoffs fail to achieve these objectives. Instead, these studies have reported time and again that less than 50% of the companies using downsizing as a cost cutting and profit increasing measure actually achieve that objective; in fact approximately 25% actually realize a decline in their overall profitability.

Why don’t layoffs produce the returns executives hope they will? In general, it is because of the effect that the layoffs have on the remaining employees.The downsizing effects them both psychologically and emotionally in very big ways. At a time when it’s critical for employees to be engaged and productive, they are demoralized, fearful, and distrustful. Those qualities are not what a company needs to be successful.

My colleague, Deanna Banks, Ph.D. and I spent the past six months studying what leaders can do to re-energize their workforce after layoffs. We found that some leaders were more successful than others at enabling their employees to bounce back after the upheaval caused by layoffs.

What Not to Do

As we interviewed employees from companies that had layoffs, we often heard stories of management teams that took action to stifle any expression of emotion. One employee even reported that the staff was forbidden from gathering in coffee break areas, hallways or offices. Rather than understanding and dealing with the outrage their people are feeling, some leaders simply want people to get over it, now. They say “Just accept it and move on.”

The truth is that when emotion grips people, they simply can’t move on. It is critical they are provided the liberty to share their concerns and work through the emotions they are feeling. If management attempts to rush the employees through this mourning process, the employees will become even more frustrated, angry and bitter.

What To Do

Whenever a layoff takes place, everyone involved is forced into a state of disruptive change. Most researchers agree that people’s emotional responses to change follow a fairly predictable pattern.

If people on your team are suffering through emotional reactions to layoffs, you can’t force them to skip ahead. You may be over it and ready to move on, but until your employees are as well, you won’t have a support system to help. Your job, rather than to push for progress sooner than they are able, is to help them progress at their own pace through the change process.

Interestingly, we discovered that the best strategy for helping employees recover from layoffs is one where the manager actually matches his or her actions to the emotions employees are experiencing. The objective isn’t to imitate the person’s emotion (e.g. respond to frustration with frustration). Rather, this means understanding what need is underlying the employee’s behavior and meeting that core need so the employee is able to move on.  

In our research, we found that successful leaders:

1.  Reduce shock by increasing communication.

2.  Respond to anger by expressing concern.

3.  Address anxiety by emphasizing clarity.

4.  Reduce grief and hopelessness by using supporting behaviors.

Employees who are emotionally supported are likely to be able to refocus on their job and maintain commitment to it. Rather than being cautious and suspicious, they will trust you for future direction. They will also be much more likely to take risks and work creatively rather than become stalled in the what-ifs that could take over their thinking.   

While there’s no panacea for recovering from a layoff, how the layoff is approached, how employees who are let go are treated, and how the surviving workforce is supported go a long way to determining the organization’s future success and viability.

Wendy Mack is a professional advisor, trainer, and author with a focus in leading and communicating change. Contact Wendy at, or Download her free e-book, Transforming Anxiety into Energy at www.WendyMack.com

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