In Layoffs, Focus on the Human Element

Clear and transparent communication can mitigate the impact on workers – and set the company up for long-term success.

Former General Electric CEO Jack Welch once said: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

To remain competitive, companies must adapt quickly to an ever-evolving business landscape. In times of growth, they may expand rapidly and hire aggressively. But when conditions shift, so must their strategies. This often requires realigning roles, streamlining processes, or improving operational efficiency to meet new objectives and needs.

The growing trend of mass layoffs in the tech sector reflects those adaptation strategies. In Singapore, data released in October by the country’s Manpower Ministry showed that corporate restructuring remained the top reason for retrenchments.

That same month, Dyson had announced a round of layoffs at its global headquarters in Singapore. An undisclosed number of employees were reportedly summoned via e-mail to one-on-one meetings where they were informed their roles were redundant and they were being let go.

The abruptness of the process left employees in shock. Morale plummeted, and Dyson faced immediate public criticism. The company was faulted for the lack of notice, poor engagement with the union and the opaque nature of the layoffs.

Such episodes have been played out at many tech companies across the globe in the past couple of year. They raise critical concerns about how downsizing is handled and their profound impact on employee motivation and well-being.

Addressing the emotional and motivational impact of layoffs on employees is critical. Mishandling these changes can lead to low morale, erosion of trust in leadership, loss of valuable talent, harm to company culture and long-term financial setbacks.

Indeed, research suggests that when employees feel a strong sense of trust and fairness within their organisation, they are far less likely to perceive reorganisations as a personal threat. Instead, these feelings can foster resilience and encourage constructive responses to organisational change.

So what does effective reorganisation hinge on?

Timely, clear and transparent communication

When an organisation foresees difficult times, it can be beneficial to inform staff of the challenges ahead.

This fosters solidarity, encourages employees to upskill, and helps them mentally prepare for potential changes, reducing the shock of reassignment or job loss.

There is rarely such a thing as too much communication during a reorganisation. Open and frequent communication helps ensure employees are well-informed, reducing uncertainty and fostering trust during transitions.

This gives them time to explore opportunities to reskill or even consider reassignments. When roles are affected by technology, competition or economic shifts, organisations can mitigate the need for layoffs.

Identifying these opportunities for adaptation early enables companies to avoid the distress and negative attention associated with retrenchments, while maintaining workforce stability and morale even in challenging times.

For example, Amazon launched the “Upskilling 2025” initiative in 2019, committing US$700 million to reskill 100,000 employees for in-demand roles in AI, cloud computing and healthcare and mitigating job displacement due to automation.

By equipping workers with skills for high-growth fields, this initiative not only maintains workforce stability but also enhances job satisfaction and retention. This future-proofing approach exemplifies how employers can adapt their talent pool to meet emerging demands, promoting both economic resilience and career advancement.

Another key aspect of communication is clarity.

Management should clearly articulate the reasons for the reorganisation, along with the processes and timelines for the new business strategy.

When employees understand what must change and why, securing their support becomes easier. Equally important is transparency about the rationale and criteria for determining who will be reassigned or let go.

Open, honest communication helps mitigate perceptions of unfairness and fosters a sense of trust during challenging transitions. Research has consistently shown that people care not only about the fairness of outcomes but also about the fairness of the processes that lead to those outcomes.

Ensuring that decisions are made through transparent and just procedures is as important as the results themselves, as it directly influences perceptions of legitimacy and trust.

When Indonesia telcos Indosat Ooredoo and Hutchison Tri Indonesia merged in 2022 and 800 people were made redundant, management had to address perceptions of favouritism towards specific employee groups. Despite the lack of evidence behind the claims, senior leadership understood the importance of addressing these concerns transparently.

Independent consultants were hired to conduct unbiased staff reviews, with a clear focus on ensuring fair and equitable placement based on merit. To support this effort, data analytics was also used to assess the company’s evolving needs, reinforcing a commitment to placing the right talent in the right roles through an objective data-driven approach.

In Singapore, companies are expected to follow the tripartite system, where the government, unions and employers collaborate to promote industrial harmony and economic growth.

For instance, Singapore Airlines (SIA) worked closely with unions and government representatives during the COVID-19 crisis to manage necessary workforce reductions. SIA’s clear communication of available support options—such as extended no-pay leave options and transition resources—illustrated its commitment to maintaining employee trust during the reorganisation process.

This approach, aligned with tripartite principles, demonstrated a strong commitment to fairness, ensuring that employees remained informed and respected throughout the process.

The human touch

Retrenchments or reassignments must be communicated through personal, face-to-face conversations, rather than impersonal methods like emails or texts. Simply put, the manner of communication highlights the level of respect the company has for employees.

The message should be delivered by someone with high emotional intelligence, capable of handling difficult conversations with empathy and care.

If an HR representative lacks these qualities, it is more appropriate for the employee’s team leader—someone they trust and know well—to convey the news. A familiar and supportive face can make all the difference in navigating such sensitive moments.

Dealing with survivor’s guilt

During times of organisational change, leaders must communicate in ways that build trust and reassurance. There is a need to acknowledge the concerns and anxieties of remaining staff with empathy and help them navigate feelings of survivor’s guilt after layoffs.

Leaders need to reinforce their sense of value and respect and keep teams engaged by empowering them to take initiative and actively contribute to shaping the new culture.

These efforts foster a sense of belonging and community, encouraging collaboration and a renewed commitment to a shared vision for the company’s future.

In a volatile economy, reorganisation plans often require adjustments, which can lead to additional personnel changes.

The “middle” phase of reorganisations is often the “messiest” because it involves executing complex changes, shifting responsibilities and adjusting team dynamics — all of which can create uncertainty and disrupt workflows. This stage requires precise coordination to ensure that operations continue smoothly and that employees are clear on their evolving roles and expectations.

Without clear planning and effective communication, companies risk long-term financial fallout, as disruptions can impact overall performance and competitiveness.

To emerge stronger, leaders must clearly define the vision, goals and timelines for execution. Regular progress updates and open communication channels are essential to keep employees informed and aligned.

Transparency and engagement during this critical period can help reduce uncertainty and foster a collective effort toward the company’s renewed success.

Takeaways for leaders and employees

The true legacy of a leader is not defined by how they steer the organisation during good times, but rather by how they behave, make decisions and lead their teams when times are tough.

Because reorganisations are anxiety-provoking, leaders should do whatever they can to support the emotional well-being of employees and engage and motivate them. By following these practices, they can make transitions smoother and restructure in a way that is fair and respectful.

With evolving technologies, job roles will continue to shift or disappear, but new opportunities will emerge. While companies may offer upskilling programmes, it’s ultimately up to employees to take charge of their career development.

In today’s fast-paced work environment, embracing continuous learning and career development is essential for thriving amidst change. By staying positive, adaptable and open to new opportunities, workers can confidently ride the waves of transformation and turn challenges into growth.

When leaders get the “human equation” right, they can guide their teams through transitions with resilience, setting the foundation for long-term organisational success.