Layoffs are one of the hardest things a company ever has to do. But they’re also one of the most defining. Not just for those who leave, but for the people who stay.
At Talent Harbour, we’ve supported organizations through this difficult terrain. What we’ve learned is this: how you let people go shapes your culture far more than why you let them go.
This month, we want to help you navigate those moments with empathy, strategy, and strength. Because getting it wrong damages morale, reputation, and productivity. But getting it right? It can rebuild loyalty, renew focus, and even reset your culture for the better.
Rebuilding After Layoffs: How to Lead Through the Storm
Let’s start with a story.
In 2020, Airbnb (a company revered for its culture) faced a gut-wrenching decision. Travel had collapsed, and they had to lay off 1,900 people, nearly 25% of the company. It could’ve destroyed morale.
But instead of hiding behind silence or corporate speak, CEO Brian Chesky wrote a public letter explaining the “why” with honesty and humility. The company offered extended benefits, helped with job placements, and built an alumni talent directory.
The result? Employees, even those laid off, shared gratitude and support. The world noticed. And Airbnb came out stronger.
That story isn't about perfection. It’s about intentional leadership during change. It’s about applying human-centered principles, even when the business rationale feels cold.
So what happens after a layoff?
1. The Culture Fracture (Survivor Syndrome)
The people who stay behind often don’t feel lucky, they feel unsettled.
This is known as Survivor Syndrome; a well-researched phenomenon where retained employees experience:
- Guilt over still having a job
- Anxiety over future layoffs
- Distrust toward leadership
If unaddressed, this results in disengagement, internal turnover, and the erosion of team culture.
Tip: Address the elephant in the room. Don’t pretend nothing happened. Invite honest conversations. Reinforce your renewed commitment to the team.
2. The Trust Rebuild (Psychological Safety)
People won’t re-engage unless they feel safe to do so. That’s where Psychological Safety, coined by Harvard professor Amy Edmondson, becomes essential.
If people are afraid to speak up, question strategy, or admit mistakes, they’ll shut down. And so will innovation!
Tip: Rebuild safety deliberately. Leaders should ask for feedback, acknowledge uncertainty, and create space for people to process. It’s okay to say, “We’re rebuilding together.”
3. The Leadership Opportunity (Kotter’s Change Model)
John Kotter’s 8-step change management framework reminds us that successful transformation requires leadership, not just execution.
After a layoff, the temptation is to rush forward. But smart leaders slow down just enough to:
- Recast the vision
- Clarify the new direction
- Empower people to take ownership
Tip: Don’t just announce the restructure. Share the why. Explain the how. And co-create the what’s next with your team.
4. The Culture Reset (Employee Experience Flywheel)
According to the Employee Experience Flywheel, every major event, like a layoff, either reinforces or resets the way people experience work.
Handled poorly, a layoff creates a ripple of disengagement.
Handled well, it becomes a chance to reshape:
- How people see leadership
- What values really matter
- How growth and recognition are built into the new structure
Tip: Use this moment to recommit to your values. Recognize who stayed. Invest in rebuilding culture deliberately. -Not just through perks, but through presence, clarity, and care.
Our Perspective
We, at Talent Harbour, have helped companies across North America navigate workforce transitions; some large, some small. And we’ve seen the difference between companies that "do layoffs" and companies that lead through them.
If you’re facing hard decisions, here’s what we’d suggest:
- Plan with empathy, not just headcount
- Communicate transparently, before, during, and after
- Offer support, career transition services, coaching, reference letters
- Rebuild actively, don’t assume trust will return on its own
Layoffs will always be hard. But they don’t have to break your people or your culture.
Handled with integrity and intention, they can become a turning point that strengthens what remains.
And if you need a partner to help lead through that moment, Talent Harbour is here to walk it with you.
