Can Company Culture Survive Layoffs?

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We are hit with new rounds of layoff announcements from major businesses daily. It started in the tech industry, which seemed like a result of over-hiring during the pandemic. Now layoffs are expanding into media outlets and retailers. The rebound we experienced in 2021 has slowed due to rising inflation and interest rates, signaling a recession may be imminent. With all of this turmoil, is it possible for workplace culture to stay intact? Can companies sustain positive, thriving cultures amid layoffs?  

When we hear the cringy stories of how Twitter layoffs were handled, it can be difficult to believe that workplace culture can survive. Research shows layoff survivors experienced a 41% decline in job satisfaction, a 36% decline in organizational commitment, and a 20% decline in job performance. This is why focusing on company culture is even more vital during challenging times like layoffs. 


In Good Times & Bad


Workplace culture is not just about perks and benefits; it is definitely not pizza parties, beer fridges, and ping pong tables. It's about shared purpose, values, and behaviors aligned for the individual employee and reinforced throughout the organization. Upholding these in good times is much easier. When profits are high, customers are happy, and stocks are up, it feels effortless to be collaborative, innovative, and passionate. But when trouble arrives, when numbers are down, that's when the hard work begins. Strength and resiliency are not born out of mild conditions; they are formed through perseverance, sculpted through conflict, and rise to meet the challenge during a crisis. 


Layoffs are stressful for everyone involved; those laid off have an immediate challenge- they need another job. They also have to address the emotional side of layoffs. Feelings of insecurity, not being enough, and wondering if they could have done something differently. Then there's a grieving process that is needed. Those left behind after massive layoffs may no longer feel secure in their roles, upset about losing a close work friend, or angry if layoffs weren't handled transparently or in a way that is true to the organization's values.


Sustaining Culture


To ensure the culture is sustained during difficult times, it is crucial for the company to provide support and resources to help through the transition. 


Challenging times are an opportunity for businesses to walk the talk, lean into the values and behaviors, and prove that these are more than just words on the wall. The core values and behaviors should be embedded into the entire layoff process by delivering the difficult news and assisting those leaving with severance packages and referrals. And also providing support to those staying behind.  


National Business Capital [one of DH's clients] has invested in its culture for years. As a financial business, when the world stopped, so did lending, which drastically impacted their business. The CEO, Joe Camberato, had to make some brutal cuts to keep the company afloat. One employee, after getting laid-off, brought Joe donuts and coffee, saying, "I know you're doing everything you can right now to get us back and rockin' and rolling, so I figured you'll need this." 


By focusing on the culture in good times, they could lean into it with humanity and heart during down times. National Business Capital's people-first culture gave them resiliency to endure the downturn and facilitated their rebound to be named Top Place to Work for the fourth consecutive year. They are now in a new growth stage and recently moved into a new office.  


Find the Opportunities


Organizations can utilize layoffs as an opportunity to reinforce their commitment to their employees and culture. This can be accomplished by treating those leaving with respect and empathy and communicating with transparency and humanity that the layoffs do not reflect their performance or value to the company. And for those who stay, allow them the time and space [with psychological safety built-in] to grieve the loss and process their feelings while also helping them see where they fit in as the company moves forward into the next phase. 


Workplace culture can not only survive layoffs, but it can also thrive. Communicate with transparency, empathy, and humanity. Listen with compassion to feedback. Encourage your team with the plan to move forward and remind everyone [whether they are leaving or staying] that they have value and that their contributions are acknowledged and appreciated. 


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About the Author

Amanda Marksmeier


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