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Preserving Talent and Culture While Conducting Layoffs

Updated: 2 days ago

As a startup founder or leader, few responsibilities feel weightier than stewarding your people - especially when you need to perform staffing cuts to extend the company’s runway. No matter how necessary, conducting layoffs is a profoundly emotional process, and how a company handles layoffs can leave an indelible mark on its reputation and culture. It's vital to approach this process with empathy, transparency, and a commitment to fairness.

This blog covers communication strategies, severance structures, cultural considerations, and leadership principles for startups to keep in mind to conduct layoffs as gracefully as possible while retaining the remaining top talent and positively evolving values amidst transition.

Communicate The Layoff News Quickly and with Context

How leadership communicates layoffs sets the psychological tone for everything that follows, including morale, trust, empathy, and external narrative framing. Avoid delaying as much as possible - once decided, swiftly establish a need-to-know cadence with compassion and context framing the message. 

  1. Personally inform managers of impacted teams first so they can prepare to support direct reports. Provide talking points addressing critical questions. Once managers establish role-specific timelines of events and access to HR contacts, have the CEO transparently announce restructuring in a company-wide forum — ideally over live video with a moderated Q&A opportunity rather than just email statements. 

  2. In the announcement, stick to a simple business rationale around why layoffs, unfortunately, became necessary, focusing on market factors rather than issues with specific teams. Assure remaining staff this doesn’t reflect lost confidence in them. Share hopeful opportunities ahead and concrete examples of how their contributions matter even more now that fewer people are powering the revised strategy. 

  3. Then, outline severance terms, anticipated offboarding timelines per role, workload redistribution plans, key contact points for questions, and leadership’s commitments around upcoming all-hands updates. Radical transparency enables people to emotionally process difficult news rather than feeling excluded, catalyzing collective support for those impacted rather than just relief or guilt among those unaffected. You’re all still in it together, but the configuration is evolving.

  4. Stick around afterward virtually for informal small group conversations, allowing organic feelings to emerge safely. Empathetic engagement from leadership often proves more meaningful than perfectly polished announcements. All people desire context, connection, and care while making meaning of unwanted change.

Structure Sensible Severance and Genuine Transition Support

Layoffs in the startup community are often cost-saving measures in order to meet investor demands or growth metrics goals. It’s not uncommon for startups to feel ‘strapped’ when looking to provide severance for departing employees. If possible, allocate additional severance weeks per year employed. For example, offer a standard eight weeks base pay plus two weeks per year worked.

But there are creative ways to offer important benefits, outside of straight cash. Thoughtfully customized sendoffs enhance everyone’s dignity and preserves your culture. Beyond minimum legal requirements, consider going the extra mile, such as:

  • Providing visits with a financial advisor

  • Alum referrals into networks

  • Resume writing resources and LinkedIn profile optimization assistance

  • Allowing your employees to keep their laptops

Custom transition assistance for each individual will help preserve your company's long-term cultural equity. Avoid hollow platitudes around vague “open doors” - genuinely activate your contacts and references to help former staffers land in new positions. Some startups even support ex-talent by engaging them as vendors later on.

This cycle of care will keep your engagement alive with talented alums, and shields your employer brand.

In The Post-Layoff Wake, Update Your Values

This challenging phase after a layoff can be a catalyst for positive change. Layoffs, though painful, offer a unique chance to realign your startup's values, goals, and culture. This is an opportune moment to reassess and reinforce what your company stands for and where it is headed. It's a time to engage with the remaining team members, understand their aspirations, and collectively build a future that aligns with your revised strategy and values.

Rather than dictating edicts during this time, allow a participatory process of rediscovery by gathering input around:  

  • Which strengths are vital to uphold in this workforce configuration versus those needing evolution? Ask both departing and current staff for qualitative reflections.

  • Who embodies behavioral traits that energize teams? These cultural champions warrant incentive to lead continuity of norms even as org design changes around them.

  • Does more space now exist to actively instill previously aspirational values that often slid behind immediate revenue metrics or product demands pre-layoffs?

  • What one value might come to the forefront in this new chapter to guide decisions and represent your employer brand? Which seems less crucial to reinforce daily?

Updated values build accountability and readiness for increased responsibility ahead. An open, participatory process invites staff to imprint fresh beliefs actively rather than feeling passively jerked along by volatile forces outside their control. 

Publicize the refreshed values guide internally and discuss it in small cohorts. Weave language into job descriptions, interview rubrics, milestone kudos, offsite agendas, and cultural infrastructure to deepen its stickiness. Continually reference the evolved values when announcing ongoing decisions post-layoffs to signal intentional leadership.

Provide Empathy and Support For Retained Staff

The workday isn't 'business as usual' for staffers who kept their roles - they're facing new concerns and challenges. Remaining team members require support to prevent negativity from growing. Here are some ways to do that:

  • For those staying onboard, empathetically acknowledge expanded workloads and uncertainty about further changes. People tend to exaggerate risk based on emotions rather than facts post-disruption mentally.  

  • Combat avoidance behaviors or silent exit planning by directly asking staff about support adjustments or resources that could renew their trust. Revisit workload prioritization systems to rebalance labor capacity amid churn.

  • Gather input on desired “culture adds” from leadership so trimmed-down crews feel like they’re actively co-creating what emerges next rather than just surviving arbitrary edicts. Psychologically investing together in rediscovering creative possibilities despite pressures fuels retention and innovation.

Anchor Change With Familiar Rituals 

Cultural consistency provides comfort when facing disorienting restructurings. Identify familiar touchpoints or rhythms that bring order and fiercely protect their continuation—even if temporarily transferred online. For example, brief Monday all-hands standups still ground priorities week-to-week, while trivia nights build resilience through laughter. Small shared rituals build a feeling of community.

Additionally, doubling down on milestone recognition, peer appreciation, and tenure celebrations signals community continuity despite exits. For instance, presenting loyalty badges and shoutout calls during early virtual Friday “Wins” sessions can help teams emotionally rebound from their post-layoff grief with renewed hope.

Investing in ritual recovery matters because uncertainty prompts an instinctual inclination towards the familiar—like the warmth of tradition peeking through disruptive winters. The startup family cocoons during vulnerability until prepared to stretch its wings anew. Anchoring innovation around core rhythms makes transformation less disorienting.

Weather Layoffs with A Commitment to your Core Values

Layoffs at your startup don't have to be the end of a positive culture. Handled with care, transparency, and a focus on the future, they can mark the start of a new, more resilient chapter. As leaders, you must navigate this transition with compassion and a steadfast commitment to your core values and each other.

In the words of author Steve Maraboli, "Incredible change happens in your life when you decide to take control of what you do have power over instead of craving control over what you don't." Embracing this transition with a proactive and caring approach can turn a challenging situation into a springboard for growth and renewed success.


Ivy Blossom is a Talent Acquisition Consultant and Professional Resume Writer known for her expertise in sourcing top-tier candidates, facilitating inclusive hiring processes, and writing resumes that take job seekers from overlooked to unforgettable. You can reach Ivy at her website,


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