What Every Manager Should Know About Leading Layoffs With Compassion

Layoffs are among the most difficult tests of leadership. No matter how experienced a manager may be, nothing fully prepares them for the moment they have to look a team member in the eye and deliver the news that their role no longer exists. The challenge does not end with the conversation itself. The quiet emptiness of a vacant desk, the anxiety among remaining team members, and the lingering question of whether it was handled correctly can weigh heavily in the days and weeks that follow.

While layoffs will never be easy, the way managers handle them can make a profound difference for them, the person laid off, and the team members that remain. With compassion, professionalism, and integrity, leaders can preserve both the humanity of their people and the strength of the team’s culture.

Leanne Elliott is a chartered occupational psychologist, consultant, and co-host of Truth, Lies & Work. Together, we examined what it means to lead thoughtfully through layoffs before, during, and after they occur.

Seeing the Human Side of Layoffs

Layoffs are a form of trauma, affecting both those leaving, staying and those delivering the news. They are “workplace trauma with a lowercase t,” as Leanne Elliott describes. Managers experience the loss vicariously, feeling the emotional weight alongside those directly affected.

Effective leadership begins with acknowledging this human side. Treating layoffs as a purely operational task risks losing sight of the people involved. The most effective leaders understand the emotions at play and prepare to handle them with empathy and composure.

Leanne notes that clarity is the first step. Even if a manager did not make the decision, they must understand why it was made. What factors led to it? Were alternative options considered? How were roles selected? Having clear answers allows communication to be confident and reduces speculation that can quickly erode trust.,Straightforward, factual communication helps employees feel safer, even in painful circumstances.

The Emotional Weight Managers Carry

Delivering a layoff carries an often-overlooked emotional toll. Managers may feel guilt for being the one who remains, anger about the decision-making process, or sadness over losing a valued team member. Because layoffs are confidential until announced, leaders often carry these emotions silently while maintaining composure for their teams.

Leanne recommends finding healthy outlets early, confiding in a senior colleague, journaling thoughts, or writing in the third person to create emotional distance. Processing emotions in advance allows full attention to focus on the employee during the conversation.

Importantly, managers must remember that the moment is about the employee. The task is to show up respectfully and fully for the individual impacted.

Prepare for the Layoff Conversation

Preparation is more than knowing what to say. It is about creating an environment that communicates respect and care.

Leanne urges managers to have a clear understanding of what is happening, why it is happening, and what support will be provided. Employees are unlikely to remember long explanations during the initial shock, so concise and grounded communication is essential. Avoid excessive justification or speculation about the future. Clarity and honesty are the most important elements.

Selecting a quiet, private location free from distractions reinforces respect and provides the employee with space to process the news. Phones should be turned off, and interruptions avoided.

After delivering the message, allowing silence is critical. Employees will respond differently, some with tears, some with anger, and others with numbness. Leanne explains that the manager’s role is to hold the space without trying to “fix” the situation. Listening actively and staying present allows the employee to set the pace for what comes next. Questions that cannot be answered immediately should be acknowledged honestly, with a promise to follow up.

Support the Team That Remains

Once layoffs are complete, a new leadership challenge emerges: helping the remaining team recover and rebuild.

The period after a layoff can feel like emotional whiplash. Leanne highlights that employees who stay often experience “survivor’s guilt,” a confusing mix of relief, sadness, and anxiety. They may question why they were spared or fear additional layoffs.

This is a time for managers to lead with openness. Acknowledging the loss honestly and giving team members permission to express their feelings helps release tension and rebuild psychological safety.

In addition, Leanne suggests managers help the team refocus on the future. Clear communication about organizational goals, priorities, and the team’s role in achieving them restores a sense of stability and purpose. Transparency is key: sharing how the organization is supporting employees who were laid off through outplacement services, financial guidance, or networking, for example, helps reassure remaining employees that colleagues were treated with dignity and that the company values people, not just profits.

Manage Your Own Recovery

Even after the immediate tasks are complete, managers need space to recover. Delivering a layoff, supporting the team, and managing personal emotions is exhausting. The cumulative weight may not be immediately apparent, but it can affect leadership performance if left unaddressed.

Leanne shares advice from a mentor: “Hide the wires.” This does not mean pretending everything is fine. Rather, it is about finding appropriate spaces with peers, mentors, or support systems to process frustration, sadness, or fear, ensuring that the team does not absorb it.

She also reminds us that emotions are contagious. Leaders who project calm confidence help their teams feel grounded. Leaders who project stress or uncertainty inadvertently spread it. Prioritizing personal well-being is not selfish; it is a responsibility to the team.

Leading With Humanity in Difficult Times

There is no perfect way to lead through a layoff. Each situation is unique, and every conversation leaves a lasting impact. What managers can control is how they show up with empathy rather than avoidance, with honesty rather than defensiveness, and with humanity rather than detachment.

Asking the right questions, communicating with compassion, and supporting both those who leave and those who remain preserves trust and dignity, the foundation of a strong team culture.

Layoffs are not just endings. They are moments that reveal the true character of leaders and organizations. 

Listen to the entire episode HERE to learn more about how to navigate layoffs.

Keep up with Leanne Elliot 

- Follow Leanne on LinkedIn here.

- Follow on Instagram here.

- Learn more on her website here.

- Explore Oblong HQ here.

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