If management is really good. And they have to do a layoff no matter what. They will cut deeper than they need to. And then explain to everybody the financial situation and why the layoff was both necessary, but sufficient to guarantee the survival of the company. They will demonstrate to the people they laid off that they’re being taken care of in the company still cares and that the survivors shouldn’t worry because the company took care of its people.

Unfortunately the reality is a lot of executives will go incommunicado for a layoff. It’ll stop relaying anything. So the worst case scenario plays out in people’s minds. Especially about finances. They get very shy about the real financial situation.

The best I’ve seen is post layoff all the survivors are given a incentive scheme to stick around. That you know increases over time. To prevent people from jumping ship immediately. Cuz no matter what you do post layoff you’re going to lose more organic people. And probably you’re more capable of people. Because they’re more able to find a job quickly. so you’re going to have a brain drain you need to fight and if you don’t you might be in a worse operational position then if you hadn’t had a lay off at all.

Especially smaller businesses cuz they suffer from key person vulnerabilities more than larger companies.

There’s a lot of variables that go into those decisions. But for many people it’s better to have a stable future prospect then a possible payout short-term.