COVID Impact: Effectively Communicating Layoffs

COVID-19 has crippled our economy: social distancing has made it impossible for companies across the country to conduct business as usual. 6.6 million Americans just filed for their first week of unemployment benefits—a new historic high as businesses continue to lay off and furlough workers amid the outbreak.

In addition to the industries hardest-hit by COVID-19 (travel, tourism, hospitality), the tech industry—especially startups—are struggling as investments, bookings, and usage of their products slow. Many executives are trying to do the right thing by taking pay cuts or furloughing employees rather than letting them go altogether in the hopes that once the economy picks up, they’ll be able to rehire them.

But some employers are imitating the 2009 movie Up in the Air and firing employees over video chat. With social distancing in place, how can employers execute tough decisions in a respectful way?

Communicating layoffs during COVID-19

To maintain trust with key stakeholders, employers have to communicate layoffs effectively and sensitively. People, including potential future employees, customers, and other stakeholders, will remember how they acted when this crisis is over; it’s paramount that employers treat people with respect and dignity.

Here are three examples employers should avoid if they are faced with the challenging and heartbreaking task of communicating layoffs or furloughs to employees.

1. Mixed Messages. ZipRecruiter CEO Ian Siegel reassured his employees that the business was on track to hit second-quarter goals, but then told hundreds of employees they were laid off four days later. Beyond communicating work-from-home and travel guidelines, employers are providing details about the health of their company amidst a recession. Employers need to make sure they are communicating that information clearly, not sugarcoating and promising that everything is going to be fine only to quickly reverse course. Employees crave honesty and straightforward communication in a crisis.

2. Collective Announcements. The corporate travel startup TripActions cut 296 employees via a company-wide Zoom meeting. Team members were invited to one of two different Zoom meetings, where they learned whether they were in the group being let go or not. Layoffs should happen face-to-face, but not in front of many other faces. Zoom and other video technologies have been a lifesaver as millions of employees work from home, but the convenience should not lead to bad communication practices. Social distancing guidelines will unfortunately require that some of these conversations happen via video screen. The only thing that could make that worse is failing to take the time to do it one-on-one.

3. Apathetic Communication. Whole Foods CEO John Mackey stepped into the fray with the suggestion that its employees donate paid time off to fellow co-workers sickened by the virus. Employees were furious that they were expected to figure this out on their own. Mackey was asking for fellow employees to shoulder the burden, rather than the company. If he was going to make such a difficult request of his employees, he needed to lead with appreciation and empathy.

For many companies, employees are the business. They’re human beings with emotions and dignity. All communications, policies, and procedures must start and end with empathy.

The Gold Standard 

No leader or CEO has ever had to make these kinds of decisions before. However, if companies are looking for best practices in these uncharted waters, electric scooter startup Bird is currently the shining example. “Layoffs are never easy or comfortable to do and COVID-19 has impacted the way they are done in at least the near term,” Bird told Business Insider. “We purposefully and intentionally did not have any video on to protect privacy as we delivered the news live to individuals.”

Instead of video, the company said it projected slides for laid-off workers to find out more about the benefits they were still entitled to—four weeks of pay, three months of medical coverage and an extended timeframe of 12 months to exercise options. Then, they followed up with everyone individually with a phone call to make sure they understood the information.

It’s easy to forget people’s feelings when you are worried about the future of your entire company. But if you communicate with the golden rule in mind, your company will still be standing long after the coronavirus.