How Do You Lay People Off in 2023?

After a hiring binge in 2021 and an economic slowdown in 2022, it’s probably not surprising that organizations across industries are starting to shed employees.

But what is surprising is the variety of ways firms are using to tell employees that their services are no longer needed. Recently, one company told all of its corporate staffers to work from home so it could conduct layoffs virtually. Some firms have sent out emails in the early hours of the morning. Others have used text messages or phone calls, whether from an affected worker’s direct supervisor or a human-resources officer. Still others are doing it the old-fashioned way—calling someone into the office to tell them they’re being let go.

What is clear is that there’s no consensus as to how to best lay people off in 2023. While critics have questioned some recent methods, experts point that the once-standard face-to-face approach isn’t practical for organizations that now have so many people working remotely. “As an HR leader, everything that I thought made sense doesn’t seem to anymore,” says Dennis Deans, senior director for human resources consulting at Korn Ferry.

Through February, US firms have laid off or otherwise discharged about 3.2 million people, according to government statistics released this week. Companies are trying to conduct these restructurings—some involving tens of thousands of workers—in a way that minimizes embarrassing mistakes or angry confrontations and also provides affected workers with resources to find a new job. This is particularly important for the large waves of Gen Z workers just entering the workforce.

“Compassion and communications are critical here,” says Zach Peikon, principal in Korn Ferry’s Marketing Officers practice. “What happens has a lasting effect on how they view their careers and organizations.”

Having the layoff conversation, while never easy, used to be pretty straightforward back when companies were a lot smaller or localized. Even in large industrial organizations, a supervisor could call a general meeting on the factory floor to deliver the news. But many 21^st-century organizations, especially those with sprawling corporate campuses, don’t tend to have spaces where the majority of employees gather at the same time. “The scale of companies and the prevalence of remote work have created a lot more complexity,” says Juan Pablo González, a Korn Ferry senior client partner and sector leader of the firm’s Professional Services practice.

Clearing the entire office has emerged as the latest strategy for delivering layoff news. A couple of firms tried it in late 2022, with varying levels of success; it may become more common in 2023. On the plus side, doing everything virtually provides an extra layer of office security. Importantly, it also gives the affected employee a chance to digest the news in an environment in which they are more comfortable. “They don’t have to suffer potential humiliation at the office,” says Ron Porter, a Korn Ferry senior client partner with the firm’s Human Resources Center of Expertise.

But experts say companies carrying out layoffs virtually can risk appearing cold and inhuman—which can hurt a firm’s reputation with both staffers and customers. The power of social media creates the potential for widespread damage if disgruntled employees voice enough complaints or speak with the media. “A firm’s brand equity is at stake,” says Laura Weiss, a Korn Ferry principal who works in leadership development.

Whatever method organizations use, experts advise that they take several critical actions. If companies announce the layoffs via email, the affected employee’s direct supervisor should follow up quickly—within the same business day, Porter recommends—by phone. If that manager is also impacted, affected employees should hear from the boss one level up or a human resources representative.

The people delivering the bad news to employees must have a clear message and be trained on how to convey it. Companies should bear in mind that this might be the first time some of their millennial- or even Gen Z-aged managers have had to let people go. Managers could potentially escalate an emotionally fraught situation—and even put organizations in legal jeopardy—if they imply that a layoff is affecting only a certain group of workers.

Firms also should be anticipating, and have answers for, employee follow-up questions on timing, severance packages, logistics, and health-care benefits. These days, Porter says, companies also should be offering outplacement support. 

For more information, contact Korn Ferry's Career Transition & Outplacement business.

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