Between December 2007, the official start of the current recession, and June 2009 more than 40,000 U.S. organizations held layoffs in an effort to reduce costs, increase profits, and improve shareholder value. Unfortunately, studies over the past two decades have shown that most of the time layoff initiatives rarely actually achieve those objectives. Instead, these studies have reported time and again that less than 50% of the companies using downsizing as a cost cutting and profit increasing measure actually achieve that objective; in fact approximately 25% actually realize a decline in their overall profitability.

Why don’t layoffs produce the returns executives hope they will? It’s the people factor.  Employees are emotionally and psychologically traumatized by layoffs. At the very point in time when employees must be fully functioning and able to take over the tasks of those who were laid off, they are unnerved, frightened and skeptical. Those qualities are not what a company needs to be successful.

My colleague, Deanna Banks, Ph.D. and I spent the past six months studying what leaders can do to re-energize their workforce after layoffs. We found that certain types of leaders are more successful than others at enabling staff to recuperate from the damage that layoffs cause.

What Not to Do

As we interviewed employees from companies that had layoffs, we often heard stories of management teams that took action to stifle any expression of emotion. One employee even reported that the staff was forbidden from gathering in coffee break areas, hallways or offices. Rather than understanding and dealing with the outrage their people are feeling, some leaders simply want people to get over it, now. They say “Just accept it and move on.”

The truth is that when emotion grips people, they simply can’t move on. It is critical they are provided the liberty to share their concerns and work through the emotions they are feeling. If management tries to rush this process and stifle the concerns the employees are expressing, the situation will only become more turbulent.

What To Do

Whenever a layoff takes place, everyone involved is forced into a state of disruptive change. Most researchers agree that people’s emotional responses to change follow a fairly predictable pattern.

If people on your team are suffering through emotional reactions to layoffs, you can’t force them to skip ahead. You may be over it and ready to forge ahead, but your staff won’t support you in those efforts until they are ready. Your job, rather than to push for progress sooner than they are able, is to help them progress at their own pace through the change process.

Interestingly, we discovered that the best strategy for helping employees recover from layoffs is one where the manager actually matches his or her actions to the emotions employees are experiencing. This does not mean mirroring the employee’s emotion (for example responding to anger with anger). Instead, the manager should try to understand what emotional need the employee needs met based on their behavior, and attempting to meet that need so that the employee can continue the healing process.

In our research, we found that successful leaders:

1.  Reduce shock by increasing communication.
2.  Respond to anger by expressing concern.
3.  Address anxiety by emphasizing clarity.
4.  Reduce grief and hopelessness by using supporting behaviors.

Employees who are emotionally supported are likely to be able to refocus on their job and maintain commitment to it. They will look to you as their manager for direction rather than feeling suspicious and sad. Rather than ending up stalled creatively, they will be more able to take control of their emotions and begin producing and taking necessary risks.

While there’s no panacea for recovering from a layoff, how the layoff is approached, how employees who are let go are treated, and how the surviving workforce is supported go a long way to determining the organization’s future success and viability.

Wendy Mack is a professional advisor, trainer, and author with a focus in leading and communicating change. Contact Wendy at, or Download her free e-book, Transforming Anxiety into Energy at www.WendyMack.com