Navigating a Furlough or Layoff Announcement

For the week ending April 18, 2020, over 4 million U.S. workers filed for unemployment insurance. This means that, since March 15, over 26 million workers have filed for benefits. If you’re one of the many businesses struggling right now due to COVID-19, you may find yourself considering furloughs, layoffs, or pay reductions. This news can be incredibly stressful for employees. A survey by Charles Schwab last year found that 59% of Americans live paycheck to paycheck.

As leaders, it’s hugely important to be able to effectively navigate these uncomfortable conversations with your employees. They are going to look to you for accurate information, guidance, and reassurance. Here are some ways you can support your employees even in the midst of providing disappointing news.

Meet with them individually for as long as they need.

Involuntary terminations based on performance or attendance should be brief meetings. Furloughs, layoffs, or pay reductions are different, especially in our current pandemic environment. You’ll want to take more time for these meetings. Your employees may have already been worrying that this might be coming. They may have watched other friends or family members go through this. Meet with each employee individually, and dedicate the time needed with each person. Some may want to just get the information and leave, while others may have a list of questions. Be sensitive to what each person needs. This is especially important if you happen to be doing this remotely rather than in-person. Try your best to at least do a videoconference so it can be as face-to-face as possible.

(Keep in mind that this employment decision isn’t up for debate. So, if the conversation starts going in that direction, gently remind the employee that this decision has already been finalized and redirect the conversation toward any other questions or concerns.)

Be direct and kind.

This will be a difficult conversation for both of you. Your role as a manager is to lead the conversation and communicate effectively. Start your conversation by explaining exactly why you’re meeting – “Steve, unfortunately, we’re here to discuss that you’re being laid off.” Conversations like this are uncomfortable, so it’s easy to find ourselves being vague and talking around the topic. Don’t beat around the bush. You’ll just confuse your employee and add to the stress and anxiety. Gently explain the reason for your meeting and that you have more information that you’ll be discussing together.

Prepare what you’ll say ahead of time. You want to be very intentional with your wording so you don’t accidentally mislead anyone or say something you’re not supposed to. It can also be easy to forget something in the midst of a conversation. You may even want to write out a script, especially if this is your first time or you’ll be meeting with some difficult employees. Note any specific wordings you want to use and information you want to make sure you provide.

Remember that how you say something can be even more important than what you say. Be kind throughout the conversation. You can deliver very difficult news in a kind way, and it will make a world of difference for both of you.

Have a witness! This can be someone from HR or another leader. This should be someone who can assist with the conversation if needed and who can pay attention to what’s said in case there are any concerns or allegations later on about what was said during the meeting.

Provide paperwork and accurate information.

Your employees may have assumptions about what a furlough, layoff, or pay reduction means, especially if they know someone else who has experienced one recently. Plus, employees may be so upset during the meeting that they don’t hear or remember a lot of what you say. You want to try to help them accurately understand what’s happening to them. Provide them with a short letter outlining what’s happening. Particularly for furloughs or schedule/pay reductions, clearly outline the impact on pay and benefits since this can vary widely from company to company. Many states require some kind of documentation when workers file for unemployment, so your letter will help with that as well. Outline in the letter that it’s due to the governor’s executive order to stay at home and a lack of work. List company benefits that the employee is eligible for, including any necessary contact information.

In the letter, consider briefly outlining how you arrived at this decision and how you as leaders are being impacted. Employees will want to know whether they’re suffering the brunt of this alone or whether you as a leader are sharing it with them. Let them know whatever you’re able to tell them – executive bonuses being removed, leaders receiving pay cuts, etc. This isn’t about bragging; it’s about demonstrating that you’re in this with them and are doing what you can to support them and the company.

Encourage your employees to file for unemployment insurance. This may surprise them since employers typically fight unemployment claims, so reiterate to your employees that you want to do everything you can to support them and you want to invite them to apply. (Of course, make sure as a company you’re all on the same page that you won’t be fighting these claims.) Temper their expectations by letting them know the unemployment offices are receiving a lot of applications right now, so it could take some time and they should apply as quickly as possible. Employees who are experiencing schedule reductions may also be eligible for unemployment, so review that with your state DOL office so you can provide accurate information to your employees. Also, let your employees know that an aspect of the CARES Act provides workers an additional $600 per week of unemployment benefits for a certain amount of time, so they may be eligible for that benefit as well.

Explain how long this will last and next steps.

Let your employees know how long this action is scheduled to last and what you anticipate for the next steps. Be honest and transparent. As much as you may want to make them feel better, this isn’t a time to give any false hopes. If your plan is for them to be able to return to their current positions, that’s great. If you think you may not be able to afford for everyone to return, then you may need to say that you’ll be reviewing next steps and will keep them updated.

It’s very important not to make promises or guarantees about exact timeline or next steps. Things are changing rapidly, so it’s hard to know for sure exactly what’s happening when. Be clear that you’re communicating how long this action is currently scheduled for and what next steps are anticipated. Include that you’ll be continually reviewing these decisions and they may change based on CDC, federal, state, and local guidelines. Let them know your goal is to care for their safety and wellbeing.

Provide verification of employment information.

Even if your hope is for your employees to remain with you or return after a layoff, provide them with anything they need to know about verification of employment, such as the contact information for the person who provides the verification. Let your employees know how much you value them and would like to have them as employees, but let them know you understand if they need another job either temporarily or long-term.

Keep communication lines open.

A lack of communication will result in assumptions, so provide regular updates regarding decisions about employment status and next steps. Also, let employees know when they can expect to receive the next update from you. Having a timeline provides reassurance and keeps employees from continually wondering what’s going on and whether you’re being transparent. You don’t have to guarantee to have all the answers (in fact, don’t make that promise); just provide an idea of a timeline – “The furlough is scheduled through April 30. We’ll be reviewing next steps and will provide you with an update by April 25.”

This is especially important if you’re trying to retain employees or want them to return to you. They may find other jobs during this time, so you may be in competition for your employees. Let them know how much you value them and that you look forward to them continuing to be part of the team.

Navigating a furlough, layoff, or pay reduction conversation is difficult and uncomfortable. Communication, kindness, and empathy will go a long way in letting your employees know that you care about them in the midst of delivering disappointing news.

Photo credit: By Natalia Gdovskaia / Canva