When companies make the difficult decision to lay off employees, they have two difficult tasks ahead of them beyond simply taking care of transitioning talent: First, they have to boost morale for remaining workers. Second, they have to keep their investors and customers feeling confident. Let’s discuss the best ways to manage the message for key stakeholders during a layoff:

How Customers and Investors Perceive Layoffs

In the short term, investors view layoffs positively because reducing payroll temporarily boosts earnings. However, in the long term, many companies may not show improved returns on either their share prices or their balance sheets. To keep your investors confident, you need to assure them that you have a restructuring plan in place. They need to know that you’re not just cutting payroll; you have an eye toward long-term growth.

For B2B businesses, it’s crucial to think carefully about whom your customers will contact next. Recognize that navigating that transition badly—by replacing a laid off representative or account manager with someone your customer does not yet trust, for example—could result in the loss of your customer. It’s not the direct cost of layoffs that cost companies in the long run. It’s the indirect costs associated with losing people who have one-on-one relationships with your customers.

Moreover, employees whom you have laid off may go on to work for customers, partners, and investors, the so the more grace with which you handle both the layoff and the employee’s transition period, the better off future customer relations will be.

Also, when layoffs come with negative publicity, they tend to give customers reason to doubt you. Your job, therefore, is to minimize negative publicity and start a flow of positive publicity. Sending the right messages to customers and investors can help you retain both of them.

Managing Perception

During a layoff period, develop a content strategy focused on trust and forward movement to comfort your customers and investors. Here are a couple of ideas of how to use content to maintain relationships investors and customers.

Explain the Decision

Because they do not want to incite feelings of “survivor’s guilt” in remaining employees or draw extra attention to the event, public relations and marketing departments often refrain from discussing even the positive effects the layoff will have. But conducting a silent layoff is a poor strategy. It shows a lack of respect for your workers, and it suggests that you have no vision for the future.

If you’ve had to let go some of your workforce, release a blog post from your CEO that addresses the layoff. Express appreciation for departing employees, and let shareholders know that you’re working to help those employees find new positions. The post can even suggest that other companies looking for these types of workers contact your HR department or your outplacement firm.

You can also use the post to discuss the new direction the company is taking. Explain research and products in development or talk about how the increased cash flow opens the door for a smart acquisition. You can also share a video in which your CEO responds to selected questions about the layoff. Share your blog post and video with investors through email, and make sure they’re appropriate for public viewing, in case an investor shares them on social media or with a journalist.

Expect Some Short-Term Negativity

Companies that have the most positive working environments may actually have the most difficulty after layoffs. Because they’ve worked in such a positive culture, employees feel a violation of the psychological contract. Your investors and customers are watching carefully to see how you treat departing employees. Assign an individual or team to respond quickly to negative social media posts about the layoffs, using these guidelines:

  • Demonstrate appropriate concern. Avoid language that suggests you feel sorry for the affected employees, and don’t apologize for the layoffs. Instead, maintain positivity about the future of both your company and your transitioning employees. Assure readers and commenters that, “we have options, including severance and outplacement, to assist our employees during this transitional time.” 
  • Offer a solution. If an employee or employee family member has posted something negative, urge the person to contact you privately to discuss unemployment benefits and outplacement support. Have content ready for former employees, such as downloadable PDF documents, to explain the next steps.
  • Make it unique. One of the worst things you can do is to copy and paste the same response to each employee. Make sure your responder shows respect by saying something different to each person.

Moving Ahead

Layoffs are painful decisions, and you need to demonstrate that you’re handling them in a decisive but caring way. Above all, don’t let these difficulties tarnish your commitment to your remaining employees. The companies that don’t sacrifice their positive work environment fare best in the long term, in terms of retention, financial performance, and customer perception.

27 February 2015

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