If people lose trust in the company, many more of the remaining employees are likely to start searching for new jobs. And intense emotional stress, like survivor's guilt, has well-established negative effects on productivity .Similar to the productivity impacts, 69% of study respondents said the quality of their company's product or service declined since the layoffs.
It's pretty common for mass layoffs to take place without a detailed and thorough redesign of the work. In other words, it's not unusual for layoffs to leave 100% of the work for 80% of the workers. And when that happens, it's virtually inevitable that the quality of that work is going to suffer. Additionally, ask yourself whether you think people perform better work when they're calm and clear-headed or when they're emotionally distraught and anxious. Mass layoffs do not engender calm mental states; emotional distress and anxiety are far more typical. And when anxiety increases, mistakes will as well. Those mistakes often lead to more anxiety, and the spiral gets worse.
That decrease can stem from anger over the handling of the layoffs, declining quality, increased workloads or any other number of other factors. The important issue is that if layoffs have eroded the quality of the workplace, it's going to be increasingly difficult to bring in new talent when it's time to start growing.
Layoffs are sometimes unavoidable, and when they're necessary, they can often feel like they needed to happen yesterday. But the research shows that if executives don't think through the later-stage consequences of those layoffs, they might not achieve all of the financial benefits they hoped for. It may take an extra few days or weeks, but carefully protecting the culture and workflows as much as possible will make it easier for the company to come out stronger on the other side.
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