December 11, 2023

Navigating Employee Engagement in the Wake of Layoffs

Layoffs can have a big impact on company culture, and rebuilding that culture can be difficult. Wavy hosted a Community Webinar earlier this year on how to navigate employee engagement in the wake of layoffs. Here's what we covered.

Earlier this year we had the pleasure of hosting three thought leaders on our Community Webinar to discuss the tricky subject of navigating employee engagement post-layoffs. As we know, the tech industry was hit with mass layoffs in the last couple of years. These layoffs obviously have had a big impact on culture, and for some companies, it can be hard to rebuild that culture in the weeks and months following.

What happens after layoffs have been conducted? What happens to culture? Do you need to rebuild it completely from scratch? How do you engage employees while also supporting alumni? These are some difficult questions that our People and Culture and HR leaders have been faced with.

We had the pleasure of hosting Noah Warder, Head of People at Guusto, Char Stark, People Operations & Talent Strategist at Beacon HR, and Diandra Forde, a seasoned People and Culture Director in the tech space. Our three thought leaders provided us with some tangible and impactful thoughts and strategies in response to these tricky questions. 

This blog summarizes our leaders’ thoughts and strategies on all things employee engagement in the wake of layoffs. We’ll briefly talk about some reasons behind the initial layoffs, dive into their strategies on how to re-engage your team post-layoffs, and close off with some important boundaries that People and HR leaders should be mindful of in the weeks following layoffs. 

Layoffs have affected companies of every size. What are some of the reasons behind the wave of layoffs?

Overhiring

Many tech companies did really well during the pandemic (which was great!), but then went into the red zone with over-hiring. They ramped up quickly, got too excited, and saw employee growth that just wasn’t scalable. Many of these companies didn’t have much of a plan, and when things shifted, they realized they hired too many people.

Change in expectations from investors

Pre-2022, the expectations were on building and growing at all costs. The runway used to be six to eight months, but now the expectation is 20 to 24 months. This changes how you run your business, the decisions you make, and what your headcount should be. Leaders are now focusing on profitability, which is really extending the runway. Folks feel like they’re in a pinch, and they have no other option to turn to other than layoffs. 

The ripple effect of layoffs

In some cases, companies didn’t necessarily need to restructure, but they saw leading tech companies like Salesforce, Google, and Meta make layoffs, so in a way it also became acceptable to do it. Some of these companies joined the wave of layoffs to maximize shareholder profits and their own profits.

What are some best practices for companies who have reached the conclusion that they need to do layoffs? What steps would you recommend for the team conducting layoffs?

The first thing to keep in mind is that everything you’ve prepared leading up to these layoffs will probably go a bit sideways—and that’s okay, that’s normal. There might be some unexpected consequences, outcomes, and reactions. Try to prepare as much as you can leading up. PYN has checklists and resources to help you navigate pre-layoffs in order to be as prepared as possible. 

It’s also important to create criteria like who is being laid off and why, and not just let people go without much thought. Remember to look at demographics to see if there’s a disproportionate number of people, such as women, who are being affected the most. Another part of conducting layoffs is looking at the job responsibilities of those who will be affected. Look into where their responsibilities will go once that person leaves. What’s mission-critical? What can be dropped? How can we spread out the pain a little bit?

Finally, really try to coach and push executives to share the pain. If you’re conducting layoffs, it’s probably not a good look for executives to continue getting bonuses and salary increases. Start talking about temporary salary cuts for executives at the minimum. Nothing looks worse than a CEO continuing to get their annual bonus when 20% of the organization just got laid off.

How does a company restructuring affect culture? What about the employees who weren’t impacted?

In the weeks and months following layoffs, companies need to focus on the retention of employees who weren’t impacted. People do jump ship. Seeing colleagues and friends get laid off really affects an employee’s sense of stability. You need to have a plan in order to rebuild trust and security. At the same time, while we want to stay positive and continue with positive messaging at our organizations, it’s important to refrain from being too positive. We need to sit in the uncomfortable feelings of losing some valuable team members, and then rebuild from there.

How can HR leaders coach executive teams in the wake of layoffs? What are some of the most important things to cover in first few months post-layoffs?

This is a super important part of navigating employee engagement and company culture in the months following layoffs. Here are some best practices for HR leaders:

👆Make sure your executive team acknowledges the layoffs

Never sweep a headcount cut under the rug. Layoffs are a traumatic experience for many and you need to keep acknowledging it happened. People would rather hear something from them than nothing at all. It's super important to coach your executive team to refrain from saying “This won’t happen again” or any similar lines. You never know what the future will hold, and it’s critical to start rebuilding trust during this period. 

🔑 Transparency is key

If possible, be transparent with finances to show your people that the company is on the right track and the trajectory is looking good. Transparency helps rebuild trust between the executive team and the frontline workforce.

💙 Be compassionate

If you really want your CEO to rebuild trust and have people re-engage with the company and the mission, they need to be empathetic and compassionate to people. Leadership has to listen to the people, acknowledge their concerns, answer questions, and admit they may not have all the answers at this point in time.

What are some strategies companies can implement to rebuild culture?

Rebuilding culture takes a while. For many companies, it can take a year to rebuild again. Keep a close eye on your messaging and communication while you rebuild. Only implement strategies that you can actually live out and maintain, otherwise, you’ll be worse off.

Try talking to your leadership individually and then as a group. Ask them how they want to move forward and what we can do to move forward. From there, there are some tangible and actionable strategies that every HR leader can implement to rebuild company culture:

💬 Conduct stay interviews

This is where you’ll find out what people actually want. By conducting these interviews, you can advocate for your staff and build your trust with them. Listen to staff needs and refrain from giving empty promises. You get a lot of juicy information that goes far when rebuilding culture. Remember to ask your staff the important question “Is there anything that I didn’t ask about that you wanted to share or bring up today?”. This is where you’ll really find out what’s going on, how your staff feels, and what you need to do.

❌ Don’t switch to corporate responses

Never do canned responses. If your company culture ship is just barely floating above water, canned responses are a sure way to sink the ship. Make sure you’re having those tough conversations.

🚫 Never tell people they should be thankful for having their jobs

This is always a mistake, and it happens more often than you think. This is the time for the organization and the leadership team to become much more human, vulnerable, humble, and transparent. Don’t tell your people how they should feel. 

💙 Remember to support those who were laid off

While it's on the external side, how a company treats the people who were laid off really impacts the culture of the people internally. Provide references, provide connections, and never discourage staying members from reaching out to those who were laid off.

How soon post-layoffs should you start implementing new initiatives?

When it comes down to rebuilding employee engagement and company culture, nothing you do is “too soon”. Layoffs don’t necessarily mean that everything needs to stop. Conduct those stay interviews and see what people actually want in the months following the layoffs. You can start small, like focus groups or book clubs, but it’s important to implement initiatives that people actually want to see. 

Partner with the managers and leaders of the individual teams first. In some cases, bringing the whole company together right after layoffs may not seem genuine. Smaller groups and teams have subcultures, so it can be beneficial to start with smaller teams and then go broader. Think intimate gatherings, team-based or cross-departmental, and really lean into what the teams actually want to do.

What are some low-cost, high-impact culture initiatives that can actually make a difference in employee engagement and motivation?

Small team-building activities like socials, happy hours, rain breaks, and check-ins can be really valuable. Starting slack threads, even if it’s just a Question of the Day, can help slowly rebuild culture. Encourage breaks, off-screen challenges, talk sessions, and more. Some companies also choose to invest a bit more in mental health and wellbeing workshop services or upping the amount folks can spend on therapy. These small changes can go a long way.

Finally, for our HR leaders, how do you prevent burnout in the wake of layoffs? 

HR professionals are typically the most affected before and after layoffs. As a People team member or HR professional, it’s easy to adopt a martyrdom attitude. However, you need to make boundaries for yourself and set expectations with your executive team.

Remember that if layoffs are occurring in your organization, all of your projects will get shifted by at least a quarter. Set those expectations up front and take time for yourself post-layoffs. Once you deal with the initial chaos of the layoffs, take a day off if you can. These conversations are hard and heavy. Don't be afraid to walk away from your screen for a bit to protect your own mental health and well-being. Lean on other HR professionals in your network for advice and don’t be afraid to ask for support.

Want to learn more about Wavy? We help teams manage all of their team building, wellness, and learning experiences in one central place. We also love hosting these community events and webinars with friends in the People and Culture community. Be on the lookout for future Community Webinars!

Want to join the panel? Reach out to our team.