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Reputational Risk: How Bungled Layoffs Can Harm Tech Brands

May 19, 2023

If mishandled, layoffs at tech companies pose a significant threat to their brands, as Hugo Guzman documents in a recent Corporate Counsel article.

You might have heard of the company that handled a large layoff by dividing employees into two adjacent rooms. Those in one room received pink slips while those in the other were loudly praised for surviving the downsizing.

“I wouldn’t want to be treated this way, and I can’t imagine treating people that way,” Level Legal CEO Joey Seeber told Corporate Counsel. “We have to always remember that we’re humans.”

Similar layoff missteps can lead to high turnover among remaining employees and make it difficult to attract new employees. Social media also allows anyone to challenge workforce reductions in a very public fashion.

To safeguard their reputations, companies should take simple yet crucial steps: announcing downsizing plans well in advance, establishing clear timelines, and helping affected employees find new jobs.

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