5 Steps for Restoring Employee Trust After a Layoff

Article originally published by SHRM.org on December 20, 2024. Written by Mindi Cox.

Few events disrupt an organization like layoffs do. While their immediate impact is felt by those departing the organization, the effects inevitably ripple through those employees who remain.  

When layoffs occur, the odds of employee anxiety increase by 139%, employee burnout rises by 158%, and employees’ sense of belonging decreases by 34%, according to the O.C. Tanner Institute’s research. These challenges chip away at morale, trust, and engagement, leaving even the strongest workplace cultures vulnerable to the devastating effects of distrust, distraction, and disconnection. 

For people leaders, navigating the aftermath of a layoff can feel daunting. Balancing business needs with the well-being of employees requires thoughtful action. But with clear communication, genuine recognition, and transparency, HR leaders can restore confidence, reinforce cultural values, and lay the groundwork for a more connected workplace. 

The way HR and people leaders approach rebuilding after a layoff sets the tone for the organization’s future. This period can either repair trust and morale or deepen feelings of disconnection and uncertainty. By taking deliberate, people-centered action, you can regain stability, re-establish a sense of purpose, and promote unity among your teams. 

Consider the following steps to foster a more resilient workplace culture: 

1. Be transparent about decisions and criteria. 
   
   Layoffs are often seen as a breach of trust, and the best way to mitigate this is through transparency. Employees need to understand why layoffs occur, how decisions are made, and what happens next. Provide a clear rationale for how layoff decisions will contribute to the health and stability of your organization to help employees process the logic of the change. HR leaders should communicate these changes by helping people leaders host a combination of one-on-one conversations, team discussions, and companywide meetings.
   
   Chances are, you’ll get questions as to why certain roles were eliminated while others were retained. Have clear answers in mind so you can address these questions openly and honestly to maintain trust and reduce speculation. Transparency helps employees feel respected and reinforces their role in your organization’s ongoing journey. 
   
   
2. Humanize the experience. 
   
   Sharing the logic behind the layoff is not enough, however. This is an emotional event, and it's important to remember that layoffs are not a clean slate. The way you treat both the employees who have been let go and those who remain leaves a lasting impression. They are watching closely, making it an opportunity to demonstrate care.
   
   What does care look like in this situation? It means offering personalized communication, sharing as much information as possible about the layoff process, and providing meaningful support to impacted employees. As an HR leader, you can provide meaningful support by sharing documents that outline key transition information and connecting affected employees with resources such as mental health support, outplacement experts, and unemployment benefit specialists. 
   
   A “white-glove” approach can help those who are leaving feel respected and valued while also reassuring the employees who remain that the organization treats people with dignity in every circumstance. These efforts go a long way toward preserving trust and creating a culture strengthened by empathy during challenging times. 
   
   
3. Recognize employee contributions. 
   
   Don’t underestimate the power of recognition. Use recognition to reinforce what success looks like in the new normal and to highlight your team’s positive contributions. Publicly recognizing employees who take on new roles or collaborate across teams, for example, will help instill a sense of confidence at a time of lingering uncertainty. 
   
   Employees at organizations where recognition is frequent, meaningful, and embedded in the culture are nine times more likely to believe changes are managed well, making recognition an important tool for navigating transitions.
   
   Whether through informal peer-to-peer recognition or a shoutout at a companywide meeting, moments of positivity re-establish connections and rebuild a sense of belonging. However, recognition must feel authentic. Mechanical or insincere efforts can do more harm than good. HR leaders can create meaningful recognition experiences by sending timely, personalized messages—be specific in the great work that was done and why it mattered. Highlighting individual contributions to team success builds a positive outlook and a sense of belonging for each employee, helping them understand the difference they make at the organization. 
   
   
4. Involve your team in shaping the future. 
   
   After a layoff, employees often wonder, “What’s next?” Restoring trust starts by giving employees a voice in the organization’s future. 
   
   As an HR leader, you can encourage employee input through surveys, feedback sessions, focus groups, or one-on-one conversations with their manager. Providing these opportunities to employees helps them feel valued and connected.
   
   When employees have a voice in organizational changes, they are eight times more likely to feel trust. Pair this feedback culture with pathways for professional growth, such as upskilling or cross-training, to empower employees to see their role in your organization’s future success.  
   
   
5. Foster moments of positivity and unity. 
   
   In the wake of a layoff, employees need clarity about when it’s OK to smile again or look ahead to the future. Encourage people leaders to bring their teams together in positive ways that remind them of the shared company mission and purpose. 
   
   Plan casual gatherings or events that focus on connection rather than work challenges or organizational changes. These occasions can be as simple as a team lunch or as structured as a companywide recognition event. Moments like these can demonstrate that your workplace remains a unified and supportive environment.