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April 11, 2023

Layoffs & Mental Health: Insights to Guide Employers

There’s no magic wand that can remove the pain and stress of looming layoffs.

In times of economic uncertainty, employers can take steps to prioritize the mental health of their employees before, during, and after a layoff. During our employer briefing last week, we heard from experts about the mental health impacts of layoffs and alternative cost-saving solutions that prioritize staff retention and morale.

Prioritizing Mental Health During Times of Uncertainty

Rebecca Brown, a mental health professional who consults with large organizations, said that employers should act in a way that responds to grief and loss for employees who are laid off, as well as uncertainty and anxiety for employees who remain in their jobs and may wonder, “Am I next?”

Tips for Employers

  • Be open, authentic, and honest. Naming and acknowledging what’s going to happen is one step toward removing harmful uncertainty. Preparing people for what’s coming allows them to start coping.
  • Identify mental health resources and benefits as early as possible. While you have a responsibility to lead with compassion, you want all employees to easily access professional mental health services if they need them.
  • Offer hope. “It’s incredibly healing for people to look to the future and find things to be hopeful about, or have people extend a resource that gives them some hope,” Brown says. For employees who are laid off, hope might come in the form of quickly finding a new job—consider creating an opt-in list to be shared with other companies that are hiring, or enlisting your own recruiters in outplacement services.

Layoffs & Mental Health Toolkit

Layoffs & Mental Health Insights to Guide Employers mockup_2

How you handle layoffs will have a direct effect on the mental health of your people, the performance of your company, and the trust you keep going forward. Our Layoffs & Mental Health toolkit, informed by psychological research and real-world business leadership, offers:

  • Tips for communicating before, during and after a layoff
  • Conversation do’s and don’ts
  • Equity considerations

Cost Savings That Boost Staff Morale

While companies look for ways to save costs in an uncertain economy, some are finding that their mental health strategy is a cost-saving strategy.

Kickstarter’s Chief Strategy Officer, Jon LeLand, told us a four-day workweek—32 hours, primarily Monday-Thursday—has saved his company money, even though salaries were left unchanged. Better-rested employees, who are more focused and less stressed, has meant a “massive shift in employee retention—we really don’t lose employees anymore.”

Company surveys show employee satisfaction at its highest levels, which has helped Kickstarter save costs in recruiting and employee-engagement offerings. “I want people to do yoga with their neighbors, not their co-workers,” LeLand said.

Tips for Employers

  • Empower your managers to find efficiencies in their workflows, for example in the frequency and structure of meetings.
  • Get your teams focused. Leland says the four-day workweek has enabled the company to make clear that, “Work is work. That’s what we’re all here to do, and we’re all pulling in the same direction. But the other side of the deal is you get more time back to be your full self and explore that outside of work.”
  • Don’t sacrifice ambition. Kickstarter didn't compromise on its goals, and made sure measurement practices were in place to track productivity. “What we’ve found is, with the right focus, the right practices and better rest, we can get done what we need to get done in 32 hours,” LeLand said.

Want More?

Get all the insights from our expert speakers in the full video of last week’s event.