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Managing Layoffs Due to Economic Downturn

Hugo Stone · 4 Aug 2026

We've been seeing a lot of economic uncertainty lately, with the UK economy experiencing a slowdown, and our company is not immune to it. I am part of the management team and we have to make some tough decisions, including letting go of some employees to reduce costs. We do not want to lose our best talent, but we also cannot afford to keep everyone on, so we are struggling to decide who to keep and who to let go, and how to handle the process in a fair and respectful way. What are some best practices for managing layoffs in a way that minimizes damage to our company culture and reputation?

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1 reply

Elias Jones · 4 Aug 2026

I've been through a similar situation a few years ago at a previous company, where we tried to soften the blow by offering a generous severance package, but it backfired as it created unrealistic expectations among the remaining staff. We had around 20 people leave, and the ones who stayed were worried they'd be next, so morale took a hit. In hindsight, I think we should have been more transparent about the reasons behind the layoffs, rather than just focusing on the financial aspect, as it might have helped to rebuild trust with the team.