rescue staff morale after company layoffs

How To Rescue Staff Morale After Company Layoffs

4 min read
Lynsey May Sutherland
Lynsey Sutherland

Streaming giant Spotify has announced its third round of staff layoffs this year, with plans to lay off 17% of its workforce and running the risk of low staff morale. Their reshuffle is part of a larger trend, as many companies look for ways to negotiate a slow economy. Spotify rival Tidal has also laid off 10% of its staff, while software company Twilio announces a 5% company-wide reduction in staffing. 

It is not only tech companies being hit. We are also seeing downsising in media sectors, as well as staff reductions in telecommunications brands such as Nokia. The mobile phone company is cutting up to 14,000 jobs due to market weaknesses, while banking group Wells Fargo is cutting back due to a reduction in deals

Layoffs Are Bad for Staff Morale

A round of high-profile layoffs can shake confidence throughout entire sectors and have a detrimental impact on the morale of employees in affected companies. Worse still, we know that many companies of all sizes are making tough staffing decisions after bloated recruitment practices during the pandemic. 

All organisations will deal with layoffs sooner or later, whether due to cutbacks or individual performance issues. Both can impact company morale – especially when people are left fearing for their roles. HR departments can combat employee stress with intentional steps towards better communication.

How to Improve Staff Morale During Company Layoffs

1. Take a human approach 

Above all, be compassionate. They may not be able to avoid cutbacks or layoffs, but organisations should treat their employees like people to maintain staff morale. Mo is an advocate for a people-led approach to work. It has been shown to improve retention and productivity.

Transparency and communication are the foundation for this method. However, there are other things you can do to help ease anxiety when morale is low. For example, communicate that you are anticipating a period of adjustment following any layoffs. This can take the immediate pressure off, letting teams know that there will be no unrealistic expectations. 

Pay attention to invisible work. Boosting team morale can fly under the radar. Recognise and reward those employees who have been supporting other teammates. Give people a shout-out for leaning into collaboration or helping things run smoothly during a disruptive period. 

Around 70% of “layoff survivors” have reported that their motivation declined after a round of staff cuts, according to a recent study by BizReport.

Staff Morale After Layoffs

2. Be transparent

No one likes dealing with the realities of layoffs. A reluctance to share negative information can lead to decision-makers being obfuscating. However, transparency is essential when dealing with these difficult situations. Do not leave a vacuum for anxious minds to fill. 

But rather than broadcasting every concern, being clear about any changes that may affect employees is essential to limiting anxiety. It allows a team to be confident that if something matters, they will hear of it directly from their line manager – not via a rumour mill. 

Our Moments feature offers an efficient way to communicate wins and difficulties within an organisation. It connects to Teams, Slack, or intranet.

3. Adjust workload

During stressful times, take stock of the demands you place on your employees. Knowing how to effectively manage a team is especially important when they are under scrutiny, as their failure reflects poorly on their manager. 

Managers and leaders should look for ways to adapt their workload to balance business needs with employee expectations. Freeing up some time leaves more space for conversation and collaboration. It also creates time for creative thinking – crucial when a company is facing financial pressures.

Mo addresses this need by automating recognition prompts. Our Boosts reduce admin workload while encouraging employee morale. (We have a 100% success rate at increasing staff engagement, positively impacting productivity.) The more you can take off your plate, the better. 

4. Emphasise communication

Communication will always be key. Ensuring that internal communications are easy to understand will reduce confusion. Encourage your team to make connections and keep talking. 

Encourage light-hearted conversation through your employee communication platforms and suggest booking extra catch-ups and one-to-ones. Make it clear that if people need a coffee break with a colleague, that is fine. When layoffs are on the cards, some may view their teammates as competitors. Making communication a priority can help keep everyone connected. 

Fear and stress thrive in silence. By emphasising openness and peer-to-peer communication, leaders give employees additional areas of support. 

Our Boosts feature highlights the things people are already doing – and doing well. This friendly, real-time feedback helps drive engagement, which in turn improves productivity and those important feelings of achievement.

5. Invest in your company culture

It is worth considering the above points even if your business is in a healthy financial position. A deluge of high-profile businesses announcing layoffs can create anxiety in the workplace, even when there is no immediate threat. A culture built on transparency and trust can help allay fears, whether you’re in the unfortunate position of having to make cuts or not. 

Helping employees feel recognised and connected is easier with Mo. Our reward and recognition platform lets busy managers meaningfully engage with their teams. Perfect when they need a little extra in the way of reassurance. 

We equip managers with weekly suggestions to energise and connect with their people, help teams build habits of recognition into their day-to-day rhythms and go beyond simple rewards as a way to motivate staff.

Find out why Mo is guaranteed to improve your work culture 👉 Book a demo

Employee Morale: Key Takeaways

  • Emphasise transparency between senior leaders and staff.
  • Allocate resources to improve employee engagement. Evidence shows that measuring employee engagement is not enough. Managers must take action.
  • Adjust workloads proportionately.
  • Do not neglect employee morale in flush times.

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