SHOT
Layoffs are a natural response to poor business performance.
CHASER
Layoffs are rarely the end; they are often just the beginning of a much harder process.
On paper, the reasoning behind layoffs is simple and logical: when revenue shrinks, costs must shrink too, and cutting headcount is the fastest way to make that happen. But the real question isn’t what’s being cut—it’s why the business is struggling in the first place.
Is the issue a temporary macroeconomic blip? Poor execution? A flawed strategy? The answer matters because if the business is on the wrong path, layoffs alone won’t solve anything—they’ll just set the stage for future cuts.
Layoffs address a symptom. The real questions are:
- Are we pursuing the right goals as a company?
- Can we still meet those goals with our current ways of working?
Of course, it’s never this clean or clinical.
Layoffs are disruptive and unsettling. They erode morale and trust and leave survivors feeling vulnerable, anxious, and even resentful. Because they are so sensitive, broad-based layoffs are rarely done with surgical precision. Instead, decisions are made top-down in small groups, meaning they are often blunt cuts that don’t align with what’s best for the business after the layoffs.
For managers, this creates a double burden: helping the team process what’s happened while recalibrating how to operate in the new reality.
INSIGHT
Layoffs take a heavy emotional toll, and the first priority is to address it. People will feel anxious, uncertain, and vulnerable. Acknowledge these feelings without sugarcoating or pretending everything is fine. Create space for honest conversations, but then refocus the team on what lies ahead.
Next, reassess strategy and operations. Are the company’s or team’s goals still viable? Are you focused on the right clients, markets, and priorities? Layoffs should ideally sharpen focus, not scatter it. Define (or reiterate) the business priorities that are going to drive results, then revisit how the work is being done—functions, workflows, roles, team structures—to ensure the operating model is aligned with both priorities and reduced headcount. Simplify where you can and address any imbalances where cuts have overloaded remaining team members.
Finally, talk regularly about business performance. Layoffs often feel like they come out of nowhere, but they rarely do. Sharing key metrics and performance updates creates an informed, business-savvy culture where employees can navigate and even foresee challenges with clarity and confidence—whether positive or negative.
With these steps, you can rebuild focus and momentum, help the team adapts to the new reality, and get the business back on track.