Mastering the Art of Humane Layoffs: A Win-Win Approach to Restructuring

1. Precise Optimization of Organizational Structure: Avoiding Cutting into Key Personnel Companies often face two major challenges after layoffs: first, misjudging the importance of employees; second, ineffective work handovers, directly or indirectly leading to operational pain points. To avoid these issues, companies should establish skill maps and clarify core business processes. Accurately identify and protect core talent, and thoroughly assess the match between employee skills and core business needs.

2. Internal Talent Mobility: Flexible Reassignment Instead of Forced Separation Employees have a thorough understanding of the company’s structure and systems. By replacing layoffs with internal transfers and establishing an internal talent marketplace that encourages cross-departmental mobility, companies can avoid simple job cuts and reduce the risk of disputes with employees. Moreover, internal talent mobility can maintain team stability while improving overall employee satisfaction, ensuring stable company operations.

3. Transparent Communication, Rebuilding Trust, and Maintaining Employer Brand Layoffs have a profound impact on employees’ lives. When companies fail to establish transparent and clear layoff communication mechanisms, they can easily fall into a trust crisis. Layoffs bring multifaceted challenges, including economic and psychological hardships for affected employees. How to help employees transition smoothly after layoffs and maintain the employer brand is also a significant issue that companies face. To this end, companies should consider taking the following measures:

•           •Establish a transparent and clear communication mechanism, follow legal procedures, and clarify compensation mechanisms: Adopt a humane communication approach, inform employees of the real issues facing the company, demonstrate the logic behind strategic adjustments, the scope and methods of layoffs, and the compensation plans. For example, when Airbnb faced layoffs, the CEO personally wrote an open letter explaining the layoff logic and offering additional benefits, fully demonstrating the transparency of the layoff plan and the company’s humanistic care from top to bottom.

•         •Comprehensive economic and psychological support, balancing financial compensation with humanistic care: For employees, while economic compensation is important, humanistic care is equally crucial. When laying off employees, companies should take a responsible attitude to help employees complete their career transitions, rather than simply “cutting ties.” In addition to statutory economic compensation, companies can help employees avoid the psychological trauma caused by layoffs through psychological rebuilding counseling and job placement assistance. This can include providing industry information and internal referral opportunities, as well as conducting job transfer introductions. Furthermore, companies can allow ample time for affected employees to find new suitable jobs, thus achieving a smooth “landing” both economically and psychologically.

In the context of increasing global economic uncertainty, layoffs seem to have become an inevitable choice for many companies. However, truly visionary business leaders should recognize that employees are the company’s most valuable asset. Through precise organizational structure optimization, transparent communication, internal talent mobility, and comprehensive support strategies, companies can reduce costs while maximizing talent protection, maintaining their employer brand, and laying a solid foundation for future development.

KOS Solutions provides comprehensive outplacement and employee assistance services aimed at helping employees better cope with the psychological stress caused by layoffs, providing market insights, professional guidance, and opportunity introductions for employee re-employment, and assisting companies in maintaining a positive employer brand. If your company is seeking professional and customized outplacement solutions, please feel free to reach out to our Head of People and Culture Winnie Tam:winnie.tam@kos-intl.com