There are times—an economic downturn, a change in regulations—when a company simply can’t provide work for everyone. And that means we may have to say goodbye to good people, trusted colleagues, long-time team members.
Even if we understand, logically, that sometimes the needs of the whole must come before the needs of the few, that doesn’t make it any easier. In many cases, reducing payroll is the only way to ensure the company’s survival. Letting five people go might be what saves the jobs—and livelihoods—of twenty-five others. But that decision often comes only after weeks or months of struggle, when we’ve already seen the signs, tried everything, and fought hard to avoid this moment.
I’ve only experienced one group layoff in my career, but I remember clearly the moment I realized: there’s no other way. Orders were falling. At first, we hoped it was temporary. We gave out unused vacation days, negotiated a four-day workweek, tried to wait it out. But the months went by, and there just wasn’t enough work. The pressure, the responsibility—none of it changed the facts. When I accepted that the decision had to be made, I focused on putting clear principles and fair processes around it.
One key principle was that those leaving should go with dignity, and with as much support as we could offer—whether that meant helping them find a new job, or simply making sure they didn’t feel personally diminished. This might seem idealistic in today’s world, but I believe it matters—for them, and for the organization as well. If we part ways without care or fairness, it poisons the atmosphere for those who remain, and it can leave a lasting mark on those who leave. That should never be the goal.
Communication was everything. We kept the conversation open. We shared updates on the company’s situation, talked about workloads, and involved the team in thinking about how we might improve things together. This kind of transparency may feel risky, but it actually builds a sense of safety. People feel they’re part of the solution—not just helpless observers. And it opens the door for real ideas to emerge, even unexpected ones.
Even if the worst does happen in the end, it’s very different to leave a workplace where you’ve been included, informed, and respected than to be handed your final papers at the gate after weeks of tense silence.
There was one more moment that was especially important to me. On the day the decision was communicated, I brought the team together. I told them how deeply sorry I was that we had come to this point—and that it had nothing to do with the quality of their work or who they were. I thanked them for their commitment, and I told them that if conditions improved and our orders picked up again, they would be the first ones we’d call back. I don’t know how much that helped in the moment—but I do know that several of them did come back later, and we were able to work together again, just like before.
There was another principle, too: think long-term. If we had to shrink now, we needed to do it in a way that allowed us to grow again later—without losing knowledge or skills we couldn’t rebuild.
Even when there are rules, concepts, and human values guiding us, this process is emotionally exhausting. We can’t make it painless—but how we go through it makes all the difference. If we lead with openness, face the hard choices together, and treat everyone with humanity, we help both those leaving and those staying move forward with dignity. In the end, this is what defines us as leaders—and shapes the kind of organization we build.
