Handling layoffs the right way: Clear, fair and human

Layoffs are one of the hardest decisions you'll face as a leader. Few situations test your judgement, communication skills and values as much as telling people they no longer have a place in your organisation.

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While the reasons for layoffs are business-driven, the impact is always personal – for those who leave and for those who stay. How you handle this moment will shape trust, culture and your employer brand for years to come. This article gives you a practical framework to approach layoffs in a way that is as clear, fair and human as possible given the circumstances.

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Why layoffs happen

Layoffs are a reality across industries, from early-stage start-ups to established organisations. You might face them because your business model shifts, funding runs out or new technologies like AI change how work gets done. Economic uncertainty, mergers or strategic refocus can all trigger restructuring and lead to difficult decisions around headcount.

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Importantly, redundancy does not automatically mean poor performance. Many of the people affected may have been strong contributors in a different context – but the context has changed. That’s where the real challenge begins: while the decision may be driven by business needs, the experience of it is always human.

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Why it matters how you let people go

Trust, culture and employer brand are built (or broken) in moments of crisis.

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Consider what’s at stake:

• Engagement and retention among employees who remain after layoffs often plummets when communication is opaque or handled carelessly
• Your reputation as an employer spreads fastest during restructuring – both through departing employees and through those who watch how you treat them
• Future recruiting becomes harder when your employer brand has been damaged by how people were let go
• Culture and values are tested in ways that nothing else can: Are you really walking the talk?

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When a CEO communicates honestly about why layoffs are happening, acknowledges the human cost and commits to supporting those affected, it sends a signal: This is the kind of company we are, even when it's hard.

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Conversely, poorly handled layoffs create lasting damage. Employees who remain feel anxious and undervalued. Those who left become detractors. Future candidates hesitate to join.

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A step-by-step framework for doing it right

Step 1: Prepare before you communicate

This is the most important step: How everything else unfolds depends largely on your preparation.

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• Define scope and rationale before anything leaks: Who is affected? Why? What’s the business case? Ensure your numbers and reasoning are solid before you involve anyone else.

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• Get the right people involved at the right time: Before any communication happens, you need to align internally – and that takes more than just deciding who gets notified when. Think of it as building the foundation:
  
  • Senior leadership & HR come first: align on the business rationale, scope, timeline and approach. This is where the core decisions are made.
  • Legal / Employment counsel joins early in the process: to validate the plan, flag legal requirements and ensure the process is watertight before anything is set in motion.
  • Direct managers are briefed personally once the plan is finalised (more on this below).
  • Affected employees are informed through individual conversations.
  • The rest of the team is informed immediately after – same day.
    

• Make sure you meet all legal requirements: Depending on your jurisdiction, there may be mandatory steps before any dismissal can take place – works council consultation, notification thresholds, notice periods or specific documentation requirements. In Germany in particular, procedural errors can render dismissals invalid. Get legal clarity early.
  👉 See the Germany-specific section below for an overview.

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• Plan your communication sequence and messaging meticulously: Every audience – affected employees, managers, the wider team, and potentially the public – needs a tailored message. Think through: What do they need to know? What questions will they have? What tone is right? Prepare templates and talking points in advance, and make sure everyone communicating on behalf of the company is aligned.

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• Brief managers personally before they hear it officially: Managers need to understand the decision, the rationale and the timeline before they can show up for their teams. Give them space to process their own emotions, then prepare them for the conversations ahead.

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• ‍Prepare for the individual conversations
  
  • Define who leads each conversation (best practice: direct manager + HR, although not always feasible)
  • Prepare a script with clear talking points, but leave room for humanity
  • Anticipate emotional reactions and have a plan for how to respond with care
  • Golden rules: Never communicate layoffs at the end of a long day. Also avoid Slack, email or video calls if that’s possible in your context.
    

• Coordinate and prepare all logistics before the conversations happen:
  
  • Systems access, offboarding and handover processes
  • Exit packages, severance terms and documentation
  • Formal delivery of dismissal letters: Plan in advance who hands over the letter, when, where, in whose presence – and how you document receipt. In Germany, personal handover is vital; registered mail alone is not sufficient (see extra section below).

Step 2: Have the conversation with honesty and care

The individual conversation is where the decision becomes real for the person sitting in front of you. How you handle it will stay with them.

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• Keep it direct and humane: Explain the decision clearly, link it to the business context, do not over-explain.
  
  
• What (not) to say:
  
  • ✅ This is a business decision. Your role is being eliminated because [specific reason linked to business strategy]."
  • ✅ "This is not a reflection of your performance or your value as a person."
  • ✅ "Here's what we're offering to support you [severance, outplacement, timeline]."
  • ❌ "This is harder for me than for you." (It's not. Don't say this.)
  • ❌ Vague reassurances or hedging language that creates false hope
  • ❌ Blame-shifting ("The board decided..." or "I had no choice...")
    

• Keep it short: Block 30 minutes in your calendar wherever possible – but don't be surprised if the meeting ends after just a few minutes. Employees often need time to process before they're ready to ask questions or respond.
  
  
• Have a clear next-steps document ready to hand over: Severance terms, timeline, support options, etc.
  
  
• Afterwards: Handle system access with dignity - it will depend on your specific context and legal aspects whether you should block access immediately.

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Step 3: Communicate to the wider organisation

After individual conversations are complete – ideally within hours – inform the rest of the team. Do this on the same day, not the next morning.

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• Who?: CEO or senior leader, ideally in a live format (all-hands, team meeting), not just in an email.
  
  
• What to cover?:
  
  • What happened and why (honest, concise, no spin)
  • How many people were affected
  • What support is being offered to those leaving
  • What this means for those staying (be honest about uncertainty if it exists)
  • What comes next (timeline for restructuring, any changes to reporting lines, etc.)
    
    
• Follow up with written communication: Send an email or share an internal post for reference, including FAQs if possible. Your employees might need to re-read this.

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An example: When Statista’s Chief People Officer Annika in der Beek communicated a layoff affecting 80 employees on LinkedIn, she didn’t hide behind corporate language. She acknowledged the difficult reality, explained the business rationale and made clear how they were supporting people properly.

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Step 4: Support departing employees holistically

Meaningful transition support is both a moral responsibility and a brand investment.
Here are a few options to consider, depending on your budget and company size:

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• Outplacement coaching: Career re-orientation, CV rewriting, interview coaching - your talent acquisition might be able to support here
  
  
• Recruiter outreach / talent network activation: Warm introductions, LinkedIn recommendations, access to alumni
  
  
• Mental health programmes, counselling or coaching: Access to sessions and experts through dedicated platforms (e.g. nilo, exitwise Berlin, openup or specialised coaches 👉Take a look at our free Coaches Directory).
  
  
• Extended notice periods or pay protection where financially possible
  
  
• Reference letters: Offered proactively, not on request

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The more generous and thoughtful your support, the better the departing employee's experience – and the stronger the signal you send to those staying.

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Step 5: Care for those who stay

Layoffs don't end when the last person leaves. In many ways, they've just begun for those who remain. Guilt, anxiety and uncertainty are common reactions. Employees wonder: Will there be more layoffs? Am I next? Did the company make the right decision? 

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• Acknowledge the emotional toll: Don't pretend it didn't happen or that people should just move on.
  
  
• Managers need specific support: Hold a dedicated briefing before the all-hands, give them space to process their own emotions and equip them to show up for their teams.
  
  
• Create space for open conversation:
  
  • Team check-ins (not for forced positivity, but real conversation)
  • 1:1s where people can ask questions and voice concerns
  • Anonymous feedback channels so employees can share without fear
    
    
• Re-articulate company vision and values: Why are we still here? Where are we going? This is not about spinning the narrative, it's about grounding people in purpose.
  
  
• Avoid “business as usual” messaging too quickly.
  
  
• Monitor engagement and morale in the weeks that follow: Use pulse surveys, 1:1s and team feedback to understand how team members are coping. Layoffs often trigger deeper issues: if trust is shaken, you need to know about it.

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Step 6: Reflect and learn as a leadership team

Two to four weeks after the layoffs, conduct a structured debrief and document your learnings.

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Specific questions to explore:

• Was the communication timeline right? Too fast, too slow, the right cadence?
• Did managers feel prepared and supported?
• Did departing employees feel treated with dignity?
• What feedback have we heard from those who left – and from those who stayed?
• What would we do differently?

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For companies in Germany:
Key legal considerations
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If you operate in Germany, layoffs happen within a clearly defined legal framework. That structure exists to protect workers – and understanding it makes the process clearer for you.

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‼️ Always consult your employment counsel (Fachanwalt / Fachanwältin für Arbeitsrecht) for your specific situation. This is a very rough orientation, not legal advice.

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Kündigungsschutz according to Kündigungsschutzgesetz (KSchG) – Dismissal Protection Act

• Applies more widely to companies with more than 10 FTE, and to employees after 6 months of employment.
  
  
• Key principle: Dismissals must be socially justified (betriebsbedingt, personenbedingt, or verhaltensbedingt). A business need alone is not enough, you must follow a structured process.
  
  
• Sozialauswahl (Social Selection) is mandatory when selecting who is made redundant if the dismissals are betriebsbedingt (operational / redundancy-based), i.e., the reason lies within the business (e.g., restructuring, cost-cutting, elimination of a position). Selection criteria include length of service, age, dependants, disability status. Errors in social selection can invalidate dismissals entirely. This is designed to protect vulnerable employees.

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Betriebsrat – Works Council

If a works council exists, it must be formally consulted before every individual dismissal (§102 BetrVG).

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For larger restructurings, two agreements are required: 

1. Interessenausgleich: negotiation of necessity and scope (why the layoffs are necessary and how many people are affected)
2. Sozialplan: agreement on compensation and support for affected employees

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No dismissal is legally valid without prior works council consultation. This is not optional.

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Massenentlassungsanzeige – Mass Redundancy Notification (§17 KSchG)

When layoffs exceed certain thresholds within 30 days, you must notify the Agentur für Arbeit (employment agency):

• 5 or more employees in companies with 21–59 staff
• 10% of employees in larger companies
• 30 or more employees in any company
  
  

Timing and documentation are not formalities; they affect the validity of dismissals.

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Kündigungsfristen – Notice Periods (§622 BGB)

Statutory minimums range from 1 to 7 months depending on length of service. Contractual notice periods often exceed statutory minimums and take precedence.

Kündigungszustellung – Formal Delivery of the Dismissal Letter

The dismissal notice must be in written form (§ 623 BGB) and – critically – delivered in a way that you can prove receipt. This is where HR teams often face the most practical complexity.

Key rules:

• Personal handover is the gold standard: hand the letter directly to the employee, ideally in the presence of a witness (e.g., HR representative).
• Courier with delivery confirmation (Bote mit Empfangsbestätigung) is a reliable alternative when in-person delivery isn't possible.
• Registered mail (Einschreiben) is often used but legally risky: if the employee isn't home and doesn't collect the letter, receipt cannot be proven at the time you need it.
• Email or digital delivery alone is not sufficient under German law.
• The date of receipt matters: it triggers the start of the employee's three-week window to file a claim under the KSchG (Kündigungsschutzklage).

Prepare the logistics in advance: who hands over the letter, when, where, with whom present – and how you document it.

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Abfindung – Severance

There is no general statutory right to severance pay (except via Sozialplan or mutual agreement). In practice, severance is frequently negotiated as part of a mutual termination agreement (Aufhebungsvertrag) to avoid legal disputes and court cases. Tax-free allowances may apply under certain conditions – your counsel can advise.