How to Break the News of a Layoff

By: Caroline Roberts

As a small business owner, it is more likely that you have a closer relationship with your employees, which will make it even more painful if you begin layoffs. When you prepare your employees for a layoff, you need to think of those who will be leaving, as well as those who are staying.

Think Before You Speak
Discuss the situation with your lawyer, and run what you are thinking of saying by her. Company layoffs can be a lawsuit minefield, so choose your words carefully, and base them on sound legal advice.

Be Consistent
As you start informing employees that they are being laid off, use the same language each time. You want to achieve the appearance of consistency and to show that you aren't favoring one person over the other. You may want to provide extra reassurance to some employees who have been around for a long time, but fight that temptation. You don't want to give false hope.

Keep Calm
Your employees may be understandably emotional, but you should not be. They may get angry or even beg to stay on the job. Emphasize that your decision is final. This will provide closure for the employee. That said, give the employee time to vent and express themselves.

Discuss the Details
Tell the employee what to expect as soon as you can. Present the employee with a well-organized packet of information that has been vetted by your lawyer. This indicates that you have taken the trouble to make sure the employee has a softer landing, and you will be more likely to part on better terms.

Explain the severance pay package, COBRA insurance and retirement plan status. Take the time to answer questions, and point out pages in the packet where an employee must sign a release, if necessary. If you can't answer some questions, don't try, for legal reasons. Note the question, and take it to your lawyer or the person in your business who handles human resource matters.

Look to the Future
You should also meet with the employees you don't lay off individually. Job loss, even if their job isn't affected, will have an impact on morale. They will want to know how their jobs will change, and you should have an answer for them. Be honest if their workloads will increase, and brainstorm shortcuts and new ideas with them.

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