It’s never the desired decision, but layoffs are sometimes necessary in business. Restructuring can be an important lever for reducing costs, improving efficiency, and maintaining a competitive edge, especially in challenging economic times. But when cuts do happen, it’s not just the departing employees who are affected. Remaining staff are left reeling from massive disruption—right when organizations need to lean on them more than ever. 

At a time when continuity is paramount, knowing how to keep employees engaged and motivated is key. Having a plan for supporting your remaining employees after a layoff is essential to meeting your ongoing business objectives, retaining remaining talent, and otherwise reducing the fallout after a restructuring.  

Why Layoffs Erode Effectiveness 

Without trust in business, you don’t have much.  

“When I think about the impacts of restructuring and layoffs on workplace culture, the number one thing that comes to mind for me is the loss of trust,” says Sarah Jensen Clayton, a Senior Client Partner and Global Lead on Korn Ferry’s Culture, Change & Communication team. “When you have a restructuring that involves layoffs, there can be a loss of trust and confidence in leadership.”  

But it’s not just the failure to meet objectives that is so damaging. Jensen Clayton says that the trust vacuum created by a restructuring is often exacerbated by the fact that these processes are usually not handled very well. “There’s often poor communication, limited transparency. Leadership teams are often not direct and authentic in their messaging and may not own up to their role in the need for restructuring.”  

In short, it’s all too easy to end up with an employee population that feels betrayed.

“When I think about the impacts of restructuring and layoffs on workplace culture, the number one thing that comes to mind for me is the loss of trust.”

Trust and Retention Strategies 

Restructures can take weeks or months to plan, and the first big mistake many organizations make is only being focused on the early stages of impending cuts and efficiencies.  

“Restructuring plans are always going to be divided into focusing on the people that are leaving and then focusing on those that are staying,” says Kevin Gagan, a Senior Client Partner in Korn Ferry’s Leadership & Professional Development team. “But as management, you don’t want to wait until after the announcement or after separations begin to turn your attention to the people that are left behind. By that time, it’s already too late.” 

When not handled thoughtfully, trust can begin to erode even at the hint of future job uncertainty. But manage it right, says Jensen Clayton, and you’re putting yourself in a position to recover more quickly. Engaging with remaining employees is a proactive approach where you can actively listen and gather feedback. 

Here are some ways to keep employees engaged and motivated after a restructure: 

1 Be transparent about business performance 

The first major mistake many organizations make when it comes to restructuring is blindsiding people. When layoffs come as a surprise, employees no longer feel like they can trust the ground under them—and the effects on engagementand motivation among those who remain can be difficult, if not impossible, to reverse.  

“Employees will feel betrayed if they haven’t seen the signals coming,” Jensen Clayton says. Make a habit of communicating how the company is doing in a very transparent way. “Signaling financial performance far in advance of a restructure is important so that people are not taken aback when these decisions are announced,” Jensen Clayton notes. 

2 Reaffirm relationships with top performers 

Businesses may worry that by signaling impending layoffs it could prompt critical employees to start looking for a new job—and it’s a legitimate concern. 

Jensen Clayton notes that a mass exodus can lead to “major gaps in institutional knowledge or capabilities”. But companies might also have legal or reputational considerations about saying too much before a restructuring, which means they can’t be as proactive as they would perhaps have liked.   

When full transparency is not possible, Jensen Clayton recommends identifying must-keep talent early on and exploring what levers can be used to maintain those relationships. “Whether it’s rewards and bonuses, or learning opportunities, there are often retention mechanisms companies can use without even mentioning restructuring,” she says. 

3 Notify employees with care 

Pink slips and in-person notifications are old news lately, as a growing number of businesses make headlines for a new type of technology-enabled layoff. Whether it’s firing people by Zoom or revoking building access and email credentials, many organizations are taking a less direct route than in the past to letting employees go.  

The problem is those who remain are watching—and treating laid-off workers so callously can have an impact on your surviving workforce, warns Gagan.  

“Just because we’re all on Zoom doesn’t mean it’s great for the CEO to lay people off on Zoom,” he says. “Technology may have evolved but it doesn’t change the core aspects of how layoffs need to be managed and what remaining employees need to see. The process needs to be very human, very thoughtful, very direct.”

Organization Strategy

Change starts with people

4 Be honest and empathetic  

Post-layoffs, confusion and rumors can take a further toll on motivation and performance.  

“People slow down, they’re cautious, they’re contributing to the rumor mill and having cyber conversations with their colleagues. Maybe they’re starting to look for jobs,” says Jensen Clayton. “Often the company structure is different—so people don’t know who they report to, or who reports to them, or who is the new process owner.” 

There is no more crucial time for managers to relate to their employees like human beings. But they need to be equipped with the right tools to do so. “Managers need training in empathy, emotional resilience, and having difficult conversations,” Gagan says. “Most important, it’s OK for managers to say, ‘we don’t know the answer to X yet, but we will communicate it with you.’ That builds trust.” 

5 Invest in your team 

Finally, it’s critical that businesses help to restore and strengthen the key relationships workers lean on everyday—those with their coworkers. “Part of that needs to be allowing for grieving, if that’s what people are feeling,” Jensen Clayton says.  

While budgets for team building may understandably be limited after a restructuring, something as simple as team lunches or happy hours can go a long way in boosting morale. “It’s just about allowing people time to be together,” notes Jensen Clayton. “When we look at engagement surveys after layoffs, those bonding opportunities and those relationships are the things that matter most to people.” 

Restructuring Support from Korn Ferry 

At the end of the day, there is no more important company asset than your people—and that’s especially true when you need to do more with less after a restructuring.  

Learn more about the factors that drive attrition—and get strategies for keeping your best talent—by consulting our resources on attrition and retention or speaking with a Korn Ferry expert today.