Psychological Safety, Redundancy and Layoffs

With companies such as Facebook, Twitter, Stripe and many others announcing redundancies and layoffs, it’s crucial to consider the impact that this has on both the people who are leaving companies, and the people staying. Making people redundant has an impact on those who must leave, but it’s important to maintain the psychological safety of those who remain in the organisation. Those who leave find new things to do and soon forget. Those who remain can often find it harder as they lose colleagues and friends from their day-to-day lives. And if psychological safety suffers, so will the organisation.

It’s always difficult delivering bad news, but Stripe CEO Patrick Collison’s email to Stripe employees about layoffs demonstrates how to do it well. Elon Musk’s approach at Twitter shows how not to do it.

Here are a few key points to consider when making layoffs, but maintaining psychological safety.

1: Be transparent.

People fear uncertainty. The more information people receive about the rationale for downsizing, the better. People will need to understand the decision, as well as what’s going to happen next. Do your best to provide as much clarity and certainty as possible.

2: Be honest.

Be upfront about the challenges and situation that brought about this decision. And be honest about the future too.

3: Be timely.

Communicate as soon as possible to as many people as possible. Don’t wait for rumours to spread, and don’t leave people wondering about their future at the organisation. You need to avoid losing the very people you need to retain. Ensure that you communicate before terminating roles or locking people out of accounts!

4: Admit your mistakes.

People will respect you for admitting decisions or actions that, in hindsight, you would have done differently. None of us are perfect, and we all make mistakes. Admit yours, and you will help in maintaining and fostering psychological safety in your teams for those who stay on.

5: And show how you’re going to improve.

The reason for redundancies and layoffs is to maximise the success of the organisation in the future. For the people who remain, be very clear about the future strategy and how you, and the organisation will learn from any mistakes or shocks.

If you’re interested in finding out more, download the psychological safety action pack or contact us to find out how we can help you.