Laying off employees is one of the most difficult situations any employer can face. The layoff process for employers goes beyond adjusting payroll numbers or restructuring departments. It involves people who have built careers, contributed to growth, and trusted your leadership.
Every month, the US lays off around 1.6 million people on average. That means more than 19 million workers end up losing their jobs in the country every year. Recently, layoffs have been frequently seen in the tech sector. In fact, in 2025 alone, there have been over 90,000 layoffs in the American tech sector.
The thing is, layoffs happen for many reasons; sometimes employers struggle to pay employees, sometimes employees underperform, and so on. On the employer’s end, handling such a sensitive process requires empathy, planning, and a clear understanding of both the human and legal dimensions involved. The way you manage layoffs can shape your reputation and influence employee morale for years.
Let’s get into how you, as an employer, should approach a layoff when letting go of multiple employees.
Understanding Why the Layoff is Necessary
Before proceeding with layoffs, you must understand why it has become unavoidable. Sometimes, companies act too quickly under pressure, letting go of employees without evaluating alternatives such as reduced hours, voluntary resignations, or departmental transfers.
Reflect on whether the issue is financial, structural, or performance-based. A clear understanding of your reasoning ensures consistency and fairness throughout the process.
When you know exactly why the layoffs are necessary, you can explain the situation transparently to those affected. Employees respect honesty, even in hard times. A thoughtful explanation reduces confusion and resentment and helps maintain trust among remaining team members.
Planning the Layoff Process Carefully
Once the decision is made, careful planning is crucial. You must determine which roles will be eliminated and how those choices align with business goals. It’s important to avoid decisions that may appear discriminatory or arbitrary.
Work with your HR and legal teams to ensure the process adheres to labor laws, contract obligations, and ethical standards. Timing also matters. Announcing layoffs just before the holidays can amplify stress and uncertainty. A manufacturing plant in Tennessee did this last year. The employers were immediately met with an unfair labor practice charge by the workers’ union representing those affected.
Therefore, choose a time when you can provide immediate support and follow-up discussions. Make sure all managers are properly briefed so that communication remains consistent across departments.
Preparing for Legal Challenges
A large-scale layoff always carries the risk of legal scrutiny. Employers should anticipate potential claims by ensuring all actions comply with employment laws and contractual obligations.
Some employees may claim wrongful termination, believing they were dismissed unfairly or for discriminatory reasons. As Conn Maciel Carey points out, wrongful termination claims also draw close attention from the Equal Employment Opportunity Commission (EEOC). If that happens, legal representation becomes necessary for employers to tackle such wrongful termination claims.
A strong wrongful termination defense for employers becomes vital in such cases. Here, employers must demonstrate that each employee’s termination was based on legitimate business needs and not personal bias. Wrongful termination claims can evolve into a wrongful termination lawsuit if the employee chooses to pursue legal action.
Building a clear, evidence-based response is key to managing any wrongful termination case. Proper documentation, consistent treatment of all employees, and adherence to internal policies can help avoid misunderstandings and strengthen your defense if disputes arise.
Communicating the Decision with Sensitivity
Delivering the message of termination is emotionally challenging for everyone involved. Whether you’re informing one person or several at once, compassion and respect should guide your words. Avoid vague or overly corporate language. Speak directly, explain the decision briefly, and express genuine gratitude for the employee’s contributions.
You should also provide practical guidance for what comes next. Information about final pay, benefits continuation, and severance packages should be clearly outlined.
Some companies offer career counseling or outplacement services to help departing employees transition smoothly. Even a small gesture like providing a reference letter can leave a lasting positive impression.
Supporting Remaining Employees After the Layoff
After a layoff, the remaining employees often experience what’s known as “survivor’s guilt.” They may feel anxious about job security or uncertain about future expectations. This is where your leadership must show stability and reassurance. Encourage open discussions and acknowledge their feelings rather than ignoring the tension.
Reinforce your company’s direction and highlight the steps you’re taking to rebuild. Employees will be more engaged when they understand how their roles contribute to recovery and long-term goals. Transparent leadership fosters renewed motivation and helps the team regain its footing after a difficult period.
Providing Fair Compensation and Benefits
Financial security is often a primary concern for laid-off employees. Offering a fair severance package can ease their transition while showing goodwill on your part.
Usually, the typical severance package is one to two weeks for every year the employee worked. Of course, the package might include several weeks of pay, extended health benefits, or assistance with job placement. This depends on the employer and the company’s policies. Even if not legally required, such gestures reflect integrity and help maintain your company’s reputation.
Ensure that employees understand the details of their final pay and benefits. Avoid delays in delivering compensation, as it may create unnecessary frustration or legal risk. Clear and prompt communication during this stage demonstrates professionalism and care.
FAQs
How much notice should employers give before a layoff?
The amount of notice depends on the company’s size, location, and legal obligations. In the US, the WARN Act typically requires employers with 100 or more employees to provide 60 days’ notice for mass layoffs. Smaller businesses should still aim to give as much notice as possible to help employees prepare for the change.
What can employers do to minimize the emotional impact of layoffs?
Employers can reduce emotional stress by showing empathy, offering career transition resources, and communicating clearly. Employees deserve to understand why the layoff is happening and how it will affect them. Offering counseling, job placement help, or even a sincere thank-you can make a meaningful difference in how the process is received.
Can a company lay off employees and then hire new ones soon after?
Yes, but the decision must be justifiable. Hiring soon after layoffs may raise concerns among former employees or regulators about the legitimacy of the layoffs. If new hires are needed, employers should document that these roles differ in function or reflect a shift in business priorities to prevent misunderstandings.
Letting go of multiple employees is never easy, but how you handle the process defines your leadership and the company’s character. Acting with compassion, fairness, and transparency ensures that both departing and remaining employees feel respected.
A layoff handled with empathy and integrity may still bring hardship, but it also preserves trust and safeguards your company’s long-term reputation. In the end, doing right by people, even in difficult times, always proves to be the best business decision.
