I read a provocative article this week in BusinessWeek about a study of Boeing workers that suggests those laid-off from the company in recent years actually fared better – in terms of their morale if not pocketbook – than the so-called survivors. It’s long been accepted that after layoffs those left behind can have trouble adjusting to the staff turmoil and need careful attention to remain productive, but this study argues they often suffer more than those who are let go.

Based on my experience (which includes work for Boeing during the tumultuous years mentioned in the research) the critical factor in this equation is the workplace environment, rather than any staff changes. If the corporate environment is tense and depressing, the survivors may indeed be worse off than those who get a fresh start. And though the unemployed certainly have to face the myriad stresses that come with finding new jobs – often at lower pay – many benefit from a more positive, less stressful working environment. In effect, money and security can sometimes be outweighed by personal satisfaction and well-being.

Other factors that play a role in which side suffers most include:

  • Who leaves and who’s left behind – are the layoffs perceived as a talent drain…are popular, talented stars part of the exodus?
  • How are the layoffs communicated – are employees kept well informed of the process (and rationale) and given a chance to air their concerns and questions?
  • Do the layoffs appear to be part of a logical, solid business strategy or a knee-jerk move to cut costs?
  • Is there a transparent, credible process for determining who gets laid-off, or is the process capricious and opaque?
  • Has leadership laid out a clear timetable and strategy for addressing market challenges (and reducing the need for future layoffs?)
  • Can the remaining employees rally around a compelling vision and benefit from a dynamic, positive culture?

Many successful companies navigate through layoffs without long-term damage, so cutting staff is not a corporate death sentence. The key is for companies to handle staff changes in a humane, candid way and sustain their culture and employee value proposition through good times and bad.

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