The Risky Business of Layoffs

The Risky Business of Layoffs

During difficult economic times companies often have to do whatever they can to reduce and control costs, which typically includes reducing their workforce.

Even in good economic conditions, reductions in the workforce remain a cost cutting strategy that many organizations utilize.

Reductions can potentially expose the organization to a variety of risks such as lawsuits, tarnished brands and less than engaged employees, all of which can carry a hefty price tag.

Financial risks may well be the most apparent concern for all employers in regards to cost containment. In the US alone, 97,443 charges with the EEOC in 2016  –  with an average out-of-court settlement cost of $40,000 for employment-related claims .  In addition, in 10% of all wrongful termination suits plaintiffs were awarded 1 million dollars.  Layoffs can be a risky business from a financial risk viewpoint.

Historically the practice of providing outplacement assistance was utilized primarily by shrewd organizations in an effort to demonstrate good faith and hopefully prevent legal claims. However, support for both the departing and remaining employees has increasingly become an integral part of best-in-class organizations cultures and a major component integrated into the corporate strategy during a reduction in the workforce.

Providing outplacement support is considered “the right thing to do” by most firms.  While it may be the right thing to do, some organizations still do not provide outplacement services, or offer a virtual low-cost option, claiming they cannot see a clear link back to the business.  It appears these leaders have difficulty connecting the dots and building the business case. Research, however, has increasingly shown that valued added face to face programs positively impact business performance.

The number one impact on whether to offer outplacement assistance is on the brand and reputation that demonstrate a culture of caring for your employees in the marketplace.

5 Short Reasons Our Clients Use Us Effective communication during a reduction in the workforce is critical to the success of the organization and helps to mitigate risks. Through experience and by following best practices, companies have become more adept at communicating through reductions in force; however there is considerable room for improvement.

Primary audiences for targeted messages include:

  • affected employees,
  • remaining employees or “survivors,” and
  • external audiences

Having worked with hundreds of clients to support departing employees and re-engage remaining employees, careful preparation is essential to a successful notification and re-engagement strategy.

The following are keys to successful notification and re-engagement:

  • prepare managers to make the notification
  • provide support and care for departing employees to move forward
  • engage remaining employees for future success

For an e-book on a clear notification process, contact Travis Jones at 

Travis Jones, CEO of Career Development PartnersTRAVIS JONES CEO

Travis has been an entrepreneur and business owner in Tulsa for over 30 years. He is a certified Life Options Retirement Coach and is certified to facilitate and deliver the Manager As Coach Learning Series (MACLS) through CPI, and a certified Career Coach. He previously served on the board of Career Partners International (CPI) and is an equity partner in CPI, offering a global reach with over 350 offices.



Travis Jones - CEO of Career Development Partners

Written By Travis Jones

Travis has been an entrepreneur and business owner in Tulsa for over 30 years. He is a well-known community servant and is dedicated to providing world-class service for everyone we encounter at Career Development Partners.

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