How to professionally handle layoffs to create a better business

Cutter Slagle
- Leadership - Aug 27, 2015

Originally reported by our sister brand Business Review Canada, Kraft Heinz is laying off 2,500 workers, which accounts for more than five percent of its total staff.  

Currently controlled by Warren Buffett’s Berkshire Hathaway and 3G Capital, the layoffs at Kraft Heinz will be taking place in both the United States and Canada, with 700 of the cuts happening at the Kraft headquarters in Northfield, Illinois. All employees will receive a minimum of six months severance pay.

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Unfortunately, when businesses are struggling, layoffs may be necessary. To help make this process go a little smoother, Business Review USA has put together some tips to help overcome layoffs and improve your business operations.

Think about the employees you need to cut

For morale purposes, it’s better to have one big layoff versus a series of small ones. It’s not fair to have employees constantly worrying whether or not if their job is in jeopardy (i.e. if they’re next on the chopping block).

During this time, be upfront and honest will your workers—they will respect you more. Educate them on how much revenue needs to come in each month in order to pay the bills and turn a profit. And if more jobs may need to be cut in the future, let your workers know.

  • Give plenty of notice (care enough about your employees to give them time to find another job)
  • Don’t lay off workers in a group, but inform them individually or the “why” and “when”
  • Communicate openly with the worker, letting he or she know what will happen next
  • Be as gracious as possible and show sympathy for the worker

Think about the positions you no longer need

When your business was thriving, you may have had certain positions or employees that you no longer need or can afford. In this case, it may be appropriate to eliminate positions and/or do some shifting of job responsibilities.

For example, you may discover that an employee in a position that is scheduled to be cut is more valuable and qualified than someone occupying a position you plan to keep. If so, make a substitution: keep the better worker, but change his or her position within the company.  

Think about how and why you’re eliminating a worker  

When making these difficult decisions, whatever you do, make sure to terminate someone fairly and legally. It is illegal to make employment decisions based on age, gender, race, disability, religion and national origin. Therefore, don’t discriminate for an illegal reason.

Specifically, when making your list of people you plan on cutting, check to see if there are several similarities between workers. If you discover that you’re eliminating mostly women or elderly employees, either rethink your plan or consult an employment lawyer to avoid potential discrimination claims.

Think about the rest of your team

You need to be open and honest with all of the employees who will be staying with the company. Different ways to possible create some ease throughout the company include:

  • Provide as much morale to the environment as you possible can
  • Be honest with the remaining team members—truthfully answer any questions they may have about the layoffs
  • Work to retain the remaining employees you have by recognizing and rewarding good performance
  • Make sure that your employees know how difficult this decision has been, but that you also plan to get through the tough times and are hopeful for a prosperous future

Remember that layoffs are difficult for everyone at the company—the employees getting cut, the employees staying and the employer. Stay calm and professional. While this is one of the hardest components of being a leader, in business, cuts sometimes just have to be made.

RELATED TOPIC: 4 tips to assist all new business owners

[SOURCE: CNNMoney and NOLO]

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