How to Manage Layoffs Caused by Coronavirus

The pandemic has affected almost all sectors worldwide, causing a lot of people to lose their jobs. Why do companies lay off employees and how can it be handled amidst this situation? Read on to find out more…

The coronavirus pandemic has almost turned the entire world upside-down in just a few months, sent the stock markets into a tailspin, pushing the world economy towards an economic slowdown, and causing numerous job losses at the same time. Thousands of businesses have closed down, and those that haven’t yet are struggling to survive in the fast-changing economy. No one knows what happens next, and to top it, companies are laying off employees, barring them of their only source of survival in such tough conditions. If your organization decides to lay off employees due to the economic effects of COVID-19, your human resources team can partner with leaders to help them make difficult decisions wisely. Managers are not only dealing with the stress and sadness of having to let go of a large number of their workers, but many of them are also feeling underlying anxiety about their own positions. So how can you manage such layoffs during the Coronavirus pandemic?

Is it very necessary to layoff?

A very basic question before going to layoff employees, consider the fact that whether it is really important to downsize your workforce? It is imperative that when sales and profits fall, managers might want to cut off on overhead costs. Laying off employees is difficult in normal times; but amidst the Coronavirus global health crisis, the task is emotionally and cognitively overwhelming, according to Joshua Margolis, a professor at Harvard Business School. The impulse to cut costs is understandable, but this is not a periodic recession. Rather, this pandemic represents an exceptionally historic moment that will end up being pivotal for the economy and for people’s communities, careers, and lives, and it might warrant a different response.

But how should your company do it? Layoffs are clearly not the only best way to cut down on costs and there are various alternatives to it. During this pandemic, HR can help the company decision-makers to weigh other options of cutting down on costs and keeping layoffs as the last option.

What are some alternatives then?

There are various solutions that a company can adopt to cut down on its costs, other laying off employees. Some of them are as follows:

1. Reducing employee pay

Employees are most of the time willing to accept a pay reduction rather than losing out on their jobs. To win employee support for pay reductions, make sure employees know that preventing layoffs is the goal, the reductions are expected to be temporary, and leaders are reducing their own salaries, too. If your firm considers reducing pay by a certain percentage across the board, also consider whether lower-paid employees should have smaller percentage reductions, so they will still take home enough money to get by.

2. Reducing work schedules

Having employees work fewer hours or days can keep pay rates constant while saving money and jobs. HR may be able to offer insights about which employees or teams could do this without compromising essential tasks and goals. Preventing overtime and overwork as much as possible can help the companies to avoid paying the extra amount of money.

3. Furloughs

For some workers, a furlough of one or two months may be preferable to losing their position permanently. If employees are assured that their job will be waiting for them afterward, some may volunteer to be furloughed — especially if you promise that healthcare insurance and other benefits will continue uninterrupted.

How to decide if you want a layoff?

HR managers can help companies decide on whether they want to lay off employees based on various factors.

1. Gather information

If you decide layoffs are necessary or others have made that decision for you, then make sure you’re prepared before you reach out to the affected employees. Figure out “how and when you will deliver the news to your employees on an individual basis” and what the message will consist of. People are likely going to have a lot of questions about the timing, their benefits, and severance. These conversations may need to happen fast, but you’ll have a better chance of easing your own and the employee’s anxiety if you can provide them with answers about what happens next.

2. Understand your limitations

Even if you’ve presided over layoffs in the past, overseeing them during the coronavirus outbreak will be different for one key reason: they won’t take place in person because of social distancing measures. What’s more, you need to have a highly private conversation at a time when privacy is difficult to achieve. Being accommodative is this situation and having considerate conversations with employees can help overcome the mental setback in this case.

3. Set the right tone

Because you will deliver the message remotely, you must take extra care to break the news with empathy and compassion. Your aim is to treat people with dignity, fairness, and respect. Even though you may worry that you, too, might get laid-off, this termination of your job is not about you.

Communicating the layoff to the respective employees

It is important for managers to be transparent and direct while communicating the news of a layoff to any employee. However, not to forget the fact that being human and compassionate at the same time is also extremely crucial. Ideally, delivering the bad news during COVID-19 should follow the best practices for layoffs at any other time: each person should have an individual and private meeting with their manager and an HR representative, with the details provided in writing. Maybe that means individual meetings (or video calls) if your company is small enough. Or maybe it means informing managers ahead of time and having them conduct short-notice meetings with their teams all at the same time, with exit interviews throughout the rest of the day.

Helping the employees who get laid off

It is only humanly at this point in time that some amount of compensation is paid to the employees who are laid off. Losing a job isn’t easy in the best of times, and it’s even harder right now when your employees are already coping with so much. They are dealing with the stress and uncertainty of the Coronavirus pandemic. Their everyday routines have been disrupted as they shelter in place. Showing empathy and respect are the most obvious ways you can treat employees humanely. That may include listening to individuals who want to talk, expressing understanding and concern for their wellbeing, and helping them to have confidence in their ability to find a new job. Be helpful. Provide information on where your employee should go for government benefits. Offer ideas about job opportunities at other organizations. Offer to serve as a reference. But make sure to never over-promise!

The important thing is, do whatever you can under the present circumstances. Think carefully if layoffs are necessary and are compassionate. Provide them with some financial assistance but don’t overcommit. Remember that only those organizations will be able to surf through Coronavirus which takes the rightful decisions.

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Suchismita Panda