The owner of Jeep and Dodge recently laid off 400 white-collar workers after ordering them to work remotely for the day, per reports from The Wall Street Journal and CNBC.
The move by Stellantis, worth $88 billion, has sparked fresh discussions on the etiquette around how to execute layoffs.
Google is one such example. It laid off 12,000 staffers in early 2023 via email. Elon Musk was also criticized for his handling of layoffs in the months after he took over Twitter. Some employees only found out they’d lost their jobs after they couldn’t access their company laptops and emails.
Experts say that virtual and remote-style layoffs aren’t the best solution — it shows a lack of empathy and consideration for the workers affected and might push remaining workers to leave.
So why do companies conduct layoffs virtually?
Employers want to maintain control over the situation
Part of the reason employers may choose to carry out difficult conversations over a video call is that it’s easier to maintain control over the situation, especially when many staff are affected.
Ben Hardy, a clinical professor of organizational behavior at London Business School, told Business Insider that a remote video call might be an easy way of “laying off a lot of people very quickly.”
“The sheer logistics of 400 people at once is difficult,” he explained. “If you call them in one by one, it takes days — or an army of managers or HR to do it. If you do it in one big meeting, you would have a room full of people who are all upset/angry, and that could turn ugly.”
Amanda Jones, senior lecturer in organizational behavior and human resources at King’s College London, told BI that it’s also a way to control “the information flow.”
“Using this method would mean that everyone had the best chance of accessing the call and that they could also all receive the information at the same time,” she said.
Jones said employers might also be trying to create distance between themselves and employees to avoid dealing with emotional outbursts when they break the bad news.
When employees feel the “psychological contract” between themselves and their employers is “violated,” they may resort to extreme reactions, Jones said.
There is an etiquette to carrying out layoffs
Companies carrying out layoffs are most likely thinking about their bottom line, the opportunity to cut costs, and increasing organizational efficiency, but they need to keep workers in mind, too.
“If an employee has had a long-term relationship with the organization and feels that they have been a loyal employee, they are likely to feel that the organization ‘owes’ them more compassion,” Jones said.
“If you compare this to a romantic relationship, it could feel akin to ending a marriage via video call, which most people would consider unkind and rather cold,” she added.
Muhammad Umar Boodoo, an associate professor at Warwick Business School, told BI that the most empathetic way to handle layoffs is “to place each employee at the heart of the process” and collaborate with them on severance pay, notice period, and exploring other opportunities for career advancement.
Laying off employees in one go through a video call suggests “a lack of empathy” as they’re likely feeling helpless at home and are left without a counselor to alleviate their anxieties, he said.
This could also hurt the morale of remaining employees and increase attrition, according to Boodoo. “Employees who weren’t laid off might feel sympathy for their best friend and former colleague, leading to a gradual disengagement from the company.”
“Research suggests that following a layoff, there’s an increase in voluntary turnover among remaining employees. Further studies indicate a decline in job satisfaction, organizational commitment, and even job performance, including sales performance and research and development,” he added.
