How Layoff Communications Affect Employee Trust and Re-employment

No one wants to be the one delivering difficult news, but getting layoff communications right is essential for showing respect to offboarding employees and preserving your organization’s reputation. When a downsizing is communicated in a fashion that reflects the organization’s culture, employees feel well respected and informed, even in a high-stakes situation. On the other hand, poor communication can quickly undermine even the strongest company culture. 

Careerminds’ Layoff Communications Report surveyed over 1,000 full-time U.S. workers who had either experienced a team layoff or had been laid off themselves in the last twelve months. The findings reveal that the way layoffs are communicated can drive turnover among remaining employees and influence how quickly departing employees secure new roles. 

When layoffs happen, timing and transparency aren’t just matters of etiquette; they’re sometimes matters of law. In the U.S., the WARN Act requires firms with over 100 employees to communicate advance notice of mass layoffs, giving workers time to prepare for unemployment and seek opportunities. Yet even with companies sticking to regulation, how employees first hear about job cuts can vary widely, and it shapes how workers feel about their employer. 

Among employees who were laid off, one in four (27%) said they first heard the news directly from their manager or HR, while one in five (21%) only found out once layoffs had already begun. However, the most common way employees learned about potential cuts was through informal conversations, rumors, or workplace gossip, as reported by 34% of respondents.  

 

For employees who remained with the company, the story looks familiar, with “rumorville” once again breaking the news before management or HR get the chance. Over a third (35%) first learned about layoffs through internal gossip, while a quarter learn from a manager or HR or through a company-wide announcement.  

The ‘when’ a communication is communicated is equally as important, extending beyond the words spoken when the news breaks: 

• 43% of employees who were laid off and 44% of those who witnessed layoffs first heard about potential job cuts before any action was taken
• About a quarter of impacted employees (25%) and 30% of witnesses learned about the layoffs after decisions had been made but before employees were let go.
• Roughly 27% of employees who were affected and 24% of itnesses only found out once the layoffs had already started 

Pulled together, these findings pose a challenge to HR leaders: rumorville often spreads faster than official channels. While HR and management prioritize informing those directly impacted, the broader workforce frequently relies on whispers and speculation, which can create uncertainty even when companies meet legal requirements. Clear and timely communication matters for everyone, not just offboarding employees. 

Raymond Lee, President of Careerminds, comments on the findings, “Senior stakeholders should always know that the way the message is shared is often just as important as the message itself, especially during the time of significant change like a layoff, when a company’s commitment to culture via comms will be put to the test.” 

When layoffs happen, employees look to leadership for explanation. Regardless of the motivation for a restructure, the Layoff Communication Report finds that HRs approach communications with an empathy-first mindset.  In many cases, employees do recognize these efforts: a majority described layoff communications as empathetic and considerate, reflecting an understanding of the personal impact such news can have.

When asked about the tone of the communications they received:

• The majority of offboarding (38%) and (44%) remaining employees felt official communications they received from HR were very empathetic and considerate
• 32% of remaining workers and 31% of offboarding employees felt official comms held a neutral tone
• Almost 1 in 3 (30%) of laid-off workers and 25% remaining employees felt official communications were somewhat cold and impersonal

When it comes to transparency about why layoffs were happening, only 28% of employees who were laid off felt that leadership was very transparent and explained the business context, selection criteria, and any plans to prevent similar situations. Nearly half (49%) described communication as somewhat transparent, sharing some information but leaving key details vague or incomplete, and 23% felt the messaging was not transparent. 

Most workers said the consistency of communications varied among senior stakeholders, when best practice is to have a unified message across teams and channels: 

• 29% of employees who were laid off and 26% of witnesses said messages were very consistent across all sources 
• 41% of laid off employees and 48% of remaining workers said messages were somewhat consistent, with only minor differences 
• Around 22% of both groups reported inconsistent messages from different sources, and 8% of laid-off employees and 4% of witnesses said communications sometimes directly contradicted each other 

While empathy is readily apparent in the tone and delivery of communications for recent layoffs, a lack of transparency can leave workers feel respected yet still left with unanswered questions which can influence trust in leadership long after layoffs are complete. 

A company culture that has been disrupted by communications that didn’t meet the expectations of employees can drastically reduce engagement and confidence in leadership. Our survey data highlights this: A significant portion of both employees who were laid off and those who witness layoffs report a decline in trust toward company leadership. 

1. Employees Report a Decline in Trust Among the Workforce and Customers

When we asked workers who had highlighted poor communication during layoffs:

• 53% of remaining workers and 59% of offboarding employees said their trust in the firm’s relationship had decreased 
• 44% of remaining workers and 34% of offboarding employees said their trust in leadership hadn’t been impacted 
• Just 8% of remaining workers and 7% of laid-off employees said their trust in leadership had improved 

This erosion of trust not only impacts team morale, but it can also extend outward to the company’s reputation with customers and clients. Across all employees surveyed, 30% reported that trust among clients and service users would decrease, and 16% said it had strongly decreased. 

Not only is trust impacted, but less-than-stellar communication during layoffs sacrifices employees’ willingness to act as brand advocates. 

2. Employees Receiving Poorly Communicated Layoffs are Less Likely to Act as Brand Advocates

Among those who were laid off, nearly 58% said they were now less likely to recommend their company as a place to work, with 31% feeling much less likely. Similarly, employees who witnessed layoffs were also affected: around 47% reported being less likely to recommend their company to a job-seeking friend, including 17% who said they were much less likely.

 

3. Miscommunication Causes Further Churn

Even when employees aren’t directly impacted by layoffs, the way those layoffs are communicated can influence engagement and retention. According to HBR, downsizing just 1% can lead to a 31% increase in voluntary employee turnover in the following year – and while some level of turnover is natural following a restructure, poor communication can exacerbate the effect by creating uncertainty, frustration, or a sense that leadership isn’t transparent. 

Employees who witnessed layoffs said: 

• 50% said poor layoff communications pushed them to consider leaving their role 
• 44% highlighted that the communications they had received had no impact on them wanting to leave or stay
• Just 6% noted that the communications had made them less likely to look for another role

4. Layoff Communications Have a Significant Impact on Re-Employment

Employees who feel their communications were fair and transparent are more likely to understand the reasoning behind a restructure, feel supported, and leverage resources provided by their employer. Conversely, those who receive poor communication may feel frustrated and disengaged, having a slowing impact on their job search. 

• Employees who received communications they perceived to be ‘fair’ were more likely to secure a new role quickly: 39% did so within one month, and 25% within 1-3 months. Fewer than 16% took more than six months to find new employment.
• Employees who saw communications as unfair took longer on average to secure a new role: only 22% found work within a month, while 35% took 1-3 months, and more than 22% were still searching after six months. 

 

 

Our findings make one thing clear: how layoffs are communicated matters just as much as the layoffs themselves. Employees who feel informed and respected are not only more likely to trust leadership and remain engaged, but also more likely to find new employment quickly. On the other hand, unclear or inconsistent communication amplifies uncertainty, reduces advocacy, and leads to higher turnover. 

As organizations navigate changes in their workforce, having a clear plan can make all the difference. 

1. Equip Notification Givers with a Layoff Script

A layoff script can provide clarity on how to best approach each notification conversation and ensure your organization has a standardized approach. These conversations should happen before any other wider announcements are made to minimize the risk of misinformation spreading through the organization. 

2. Align Your HR Team with Comprehensive Answers 

Your HR team needs to be fully prepared with what to say during a layoff event. They should be equipped to answer questions about company benefits such as healthcare, financial planning, and outplacement. They should also be prepared on how to answer serious inquiries about mental health or company foul play in lieu of the stress of layoffs. 

3. Keep Remaining Employees in the Loop

Once notifications are complete, communicate clearly with the wider firm. Explain the changes, how they affect ongoing work, and reaffirm the company’s direction to maintain trust and morale. 

4. Provide a Standardized Offboarding Package 

Give every laid-off employee clear documentation outlining their benefits, severance, and available support, including outplacement services that will help them secure their next role. 

This report is based on a survey conducted by Careerminds in October 2025, gathering insights from 1,000 full-time U.S. workers who had witnessed layoffs on their team or had been laid off in the last year. Further analysis of survey answers has been conducted to identify correlations between those who ranked layoff communications as fair and how quickly they achieved reemployment.