The Business Costs of Redundancies: How to Protect Your Brand, Team & Bottom Line

Companies perform layoffs with one primary goal in mind: reducing expenses. This may sound simple, but these reduction events can be quite complex in reality—and in the end, may actually cost the company a lot. 

Poorly managed redundancies impact more than those leaving the organization; they can erode trust, damage your brand, slow down hiring, increase attrition, and even cause legal trouble. Sooner or later, these outcomes are likely to have an impact on the company’s revenue.

We cover these serious, often underestimated business costs of poorly managed layoffs in our new 2025 Careerminds report Improving Career Transition Support, created alongside research agency Adience. This article will present our report’s data on these business risks and the value of career transition support as a strategic tool to protect your bottom line, reputation, and workforce.

Redundancies may balance a spreadsheet in the short term, but for many organizations, they come at a much higher price down the road. If not managed with care and strategy, layoffs will have repercussions in every area of the business. 

Based on our survey responses from HR and procurement leaders across the US, the Careerminds 2025 report reveals a worrying picture about layoffs and their negative effects on organizations.

Let’s review each of the respondents’ most significant concerns in detail, with relevant data from the report that better illustrate their worries.

If you see brand reputation as merely a marketing concern, think again. Reputation is a major talent acquisition and retention asset that’s vital to ensuring that your company has a talented, motivated staff. 

Poorly handled redundancies can tank employer ratings on social media, review sites like Glassdoor, and other media coverage, dissuading top talent from joining your company.

As one HR leader quoted in the report says, “It helps people leave on good terms, which makes a big difference. When layoffs are handled with respect, it preserves how people talk about you afterward.”

Survivor syndrome is real. The fear, guilt, and stress left behind after layoffs can erode productivity and increase voluntary turnover. Trust in leadership declines, and psychological safety takes a hit. This drop in engagement affects team cohesion and slows down recovery—just when businesses most need agility and focus.

Company culture can suffer during workforce changes. Poorly communicated or abrupt layoffs can undermine confidence in leadership and damage long-term trust. When this trust fades, engagement falls, innovation slows, and retention challenges multiply.

Laying off staff shrinks both your team and your pipeline. Without proper support, disrupted teams take longer to recover, hiring costs rise, and laid-off employees struggle to find new jobs.

Organizations without career transition services are more likely to see:

• Longer time-to-hire
• Delayed re-staffing of critical roles
• Fewer “boomerang” employees (rehired former employees)

Finally, redundancies carry potential legal implications, especially if severance, notice periods, or WARN Act requirements aren’t handled correctly. This is especially risky for large organizations operating across multiple jurisdictions.

Career transition programs like outplacement services—especially those offered by external partners—can help reduce this risk by ensuring compliant and humane practices.

Want to see our full report on these business concerns? Click below to download our 2025 report Improving Career Transition Support with relevant data, insights, and strategies to guide your next workforce decision with confidence.

Many view career transition support as a standard component of severance packages. However, our report goes further to reframe it as a core business strategy—one that protects brand equity, improves morale, and reduces potential future costs as a result of a layoff.

Here’s what organizations experienced after offering professional career transition services:

• 98% reported improved employee satisfaction.
• 55% saw faster time-to-employment for departing employees.
• 50% experienced an uplift in employer brand perception.
• 78% reported improved rehiring rates of former employees.

By giving employees the tools to land on their feet, organizations strengthen their alumni networks, reduce bad press, and boost productivity for remaining staff. “After receiving transition support, our workforce felt confident when it came to career shifts,” one HR leader shared.

Many HR teams lack the resources to deliver high-quality, personalized support to employees affected by layoffs. Outsourcing career transition services to a trusted partner ensures a better experience for departing staff and delivers measurable operational and financial benefits.

Let’s review some of the key benefits mentioned by the surveyed professionals in our 2025 report.

• 44% of HR leaders say that outsourcing reduces internal workload.
• 34% cite improved legal compliance and reduced exposure.
• 32% say that it lowers costs compared to managing in-house programs.

• Employees receive tailored, high-quality coaching and resources.
• Thoughtfully outsourced support reduces resentment and fosters goodwill.
• This career transition support enhances retention among remaining employees.
• It demonstrates a values-driven approach to leadership.

By having a third–party outplacement service provider, one respondent says that “employees are guided toward meaningful careers, not just immediate jobs.” This quote reinforces how outsourcing career transition support, like outplacement, is a strategic advantage for everyone.

To skeptical stakeholders, investing in offboarding support might seem like a nice-to-have. But the data paints a different picture. 

Career transition support delivers measurable ROI across multiple business metrics, such as the ones listed below:

Metric:	Impact Reported:
Employee satisfaction	98% positive impact
Employer brand rating	50% improvement
Post-layoff productivity	38% improvement
Rehire rates for alumni	78% increase

The outcomes of career transition support translate directly into stronger financial performance:

• Reduces legal exposure: Professional career transition services ensure compliance with employment laws and regulations, lowering the risk of costly lawsuits, settlements, and penalties. By reducing legal spend, organizations preserve budget for growth-oriented initiatives.
• Shortens rehire cycles: By helping departing employees secure new roles faster, career transition support minimizes disruption to talent pipelines. Faster placement means a healthier employer reputation, making it easier and cheaper to attract high-quality candidates in the future.
• Protects brand equity: Handling redundancies with empathy and professionalism enhances brand perception. A stronger employer reputation boosts talent acquisition efforts, customer confidence, and even investor relations—all of which contribute to long-term profitability.
• Relieves HR teams: Outsourcing transition services lightens the administrative and emotional workload on HR. This frees HR leaders to focus on strategic initiatives, workforce planning, and engagement programs that drive productivity and revenue growth.
• Lowers turnover: Supporting employees respectfully during layoffs strengthens trust and loyalty among those who remain. This leads to lower voluntary attrition, saving the organization significant replacement and training costs.

In essence, career transition support acts as reputation insurance and a productivity buffer during periods of workforce change. As one surveyed professional says, “Our alumni often say the support made all the difference.”

The most successful organizations don’t treat layoffs as isolated events. Instead, they manage them as part of a broader employee lifecycle strategy. Through this vision, they establish a clear, repeatable approach to career transition support that protects culture, brand, and productivity.

Organizations leading in this area consistently:

• Anticipate the full business impact of redundancies, including morale, trust, and productivity effects.
• Invest in scalable, outsourced transition services to deliver consistent, high-quality support.
• Communicate transparently and empathetically with both departing and remaining staff.
• Track downstream effects on retention, hiring, brand perception, and engagement.
• Use transition success as a leadership benchmark to reinforce values and build trust.

By following these practices, companies reduce costly business risks and strengthen long-term relationships with employees, alumni, and the broader talent landscape. In a job market where every organization is on the lookout for top talent, a well-run transition strategy signals leadership excellence.

If your organization is restructuring, downsizing, or preparing for potential workforce reductions, you should plan the outcome just as thoughtfully as you do the exit. 

Redundancies done poorly are a business risk, one that impacts productivity, brand equity, legal standing, and future growth. But when managed well with a robust, outsourced career transition support program, layoffs can become a testament to your organization’s values and long-term thinking.

Our 2025 Careerminds report Improving Career Transition Support provides benchmark data and actionable insights for HR, procurement, and operations leaders. Download the full report to assess your organization’s risk profile and future-proof your offboarding strategy.

Want to talk about reducing your RIF risk footprint? Click below to connect with our experts and learn how our modern, results-oriented approach to outplacement can help protect your brand, team, and bottom line.