Layoffs. Cutbacks. Downsizing. Rightsizing. Smartsizing. It’s called many things. And if you’re a corporate leader planning a layoff, what you decide to call it will be one of many agonizing decisions you’ll have to make.
Rest assured, when it comes to tech layoffs, communications professionals are right to agonize. In a world that’s quick to pounce, no decision is too small.
Or course, it’s also important to remember where you fit in the grand scope of things. More than 425 tech companies have laid off a total of 120,320+ employees in 2023. If you are about to go through your own reduction in workforce, you’re not alone. From a PR perspective, it helps that larger macroeconomic forces are in play here, but there are still all kinds of nuances to consider. There’s the human toll, questions surrounding the health of the business, and everything in between. Communicating layoffs requires striking a very delicate balance—something we at 10Fold are counseling clients on now.
Of course, as we tell our clients, there are no easy answers, but after two recessions and one global pandemic in the last 10 years or so we can confidently suggest three guiding principles:
#1: Involve Your PR Team in the Earliest Stages of Layoff Planning
It may seem like a no-brainer. You’re dealing with a crisis requiring a solid communications plan. “Bring in the experts,” right?
And yet it’s surprising how long it can take for PR to get the call. Start-ups and even later stage private companies often want to hash out their layoff strategies with their legal teams in private, figuring it’s PR’s job to message what’s already been put into motion.
This is a mistake.
Your PR team will lend its greatest value when brought into those early discussions. Think of PR as the angel on your shoulder. We’re here to ensure public opinion factors into every decision, because ultimately, it’s the court of public opinion that your case will be presented in.
As tough decisions are being made, it’s important to have PR’s perspective on how those decisions will be received. Because while layoffs will hurt your company’s reputation–there’s no avoiding that–it’s HOW you lay people off that can turn a little public criticism into torches and pitchforks. And even the most sophisticated messaging will be unable to rescue you.
What matters more than a layoff–even more than how you present a layoff–is how you conduct the layoff. Your public messages must be aligned with industry context. Have your competitors announced layoffs? How did reporters react? What information was disclosed and how did reporters include that detail in their stories? This is the difference between proactive PR and reactive PR.
#2: Communicate with Transparency and Empathy–but Also Strength
Companies often get dinged for not being transparent or empathetic enough in their communications around layoffs. In the case of transparency, companies trying to control the message may find they’re not being heard. Remember, where facts don’t show, rumors and innuendo flow. For every piece of information you’re unable or unwilling to give, there’s an employee, competitor or third party data provider happy to serve up a limited or distorted version of it.
That isn’t to say companies should overcommunicate. We had a client that once asked whether they should issue a statement around a contractor organization they were letting go. No, this is not necessary due to the nature of employment. On a related note, in cases where statements should be made, if the layoff is part of a shift in strategy, the reduction should be discussed in this way. After all, the reason for a layoff is one of the first questions a reporter will ask.
When Zoom announced its layoffs, CEO Eric Yuan issued an 860-word statement that included the facts of the layoff—including the number of employees let go and the pandemic-era business decisions that ultimately led to the layoff—along with an admission of fault. His blog post explained the support those who had been let go would get as well as the structural changes remaining teams would have to face. The CEO took a 98% pay cut. Executive leadership salaries also took a sharp hit.
The post was informative, transparent, humble, human.
Did it save the company from criticism? Of course not. The Washington Post was one of many to point to Zoom fatigue, competition from Microsoft and declines in sales forecasts, revenue and stock performance to call the company’s very future into question.
Still, many of those same outlets, NPR for one, called out the CEO’s pay cut in the headline. Ask anyone about the news, and the 98% pay cut is probably the one thing they recall. Do layoff communications strategies depend on such sacrifices? No. But it is a fine example of a company doing the best it can with a no-win situation.
And that’s something all organizations need to remember: in the case of communicating around layoffs, the best you can do is not make it worse than it needs to be. Companies often do this by trying to hide from or downplay the situation, because they forget one core truth about communicating a layoff: you can’t fully control what’s being communicated to the media. But if you’re trusted, you can do more to command the conversation.
Finally, yes, while transparency and empathy are important, you do want to communicate from a position of strength. It’s important for all company stakeholders to know that there is a path forward along with strong leadership that will guide the company back to better days. The trick is striking the right balance and the right timing, which your PR team will help you do. It’s not easy to combine humility in the face of lost talent with assurances that those who remain will be taken care of.
#3 Anticipate Questions and Know Your Facts
So, what happens after a well-thought-out layoff and communications plan has been put into effect? Let’s say it’s been a week. Nobody’s writing about the layoff in the media or talking about it on LinkedIn. The situation, it seems, is in the rearview mirror… Until you get an email from a trade reporter asking you to confirm a 15% reduction in your workforce.
You might be tempted not to respond. You’ve gone this long without inquiries. It could be an outlier, right?
Don’t count on it. Depending on how much media attention your company or the space it’s in receives, it could be the beginning. Because once one publication covers the news, others are sure to follow.
So even if you’re a company that isn’t required to give notice of a layoff (see the WARN Act, which requires certain companies to give 60-day notice of mass layoffs), we do advise having a strong statement and thorough Q&A prepared. Here are some questions to expect and prepare for:
- What percentage of your workforce is being let go?
- How many employees will that be?
- Will any roles, departments or geos be particularly affected?
- What is the reason for the layoff?
- Is there a chance for more layoffs in the near term?
- Is the company losing revenue / customers?
- Is the company profitable? If not, when will it be?
- What kind of severance did those impacted receive? Will the company assist with job placement?
You think these questions are tough? Be thankful if you get them. They’re much tougher if the layoff was poorly managed. Still, it’s only the beginning depending on the situation. Companies are advised to have all the facts and figures about the event PR-approved and at their fingertips. This includes, as mentioned, information that puts the layoff in proper context. Is the entire industry being hit? Why and how does your company compare? But you may also have to anticipate explaining the paradox of laying off and hiring at the same time or laying off so soon after a round of funding (something quite a few companies are doing right now). Once again, this is where information trumps a vacuum. If you’re transitioning people from one department to another, this is information both internal and external audiences will want to know.
The good news is journalists, for the most part, aren’t trying to rake you over the coals. Trade reporters in particular find little pleasure in covering bad times when it impacts the industries, companies and people on which their own livelihoods depend. Companies that work closely with their PR teams to answer reporter questions–or at the very least provide a statement communicating compassion and stability–tend to get balanced treatment.
And one step closer to rebuilding trust.