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Tips for Dealing with Company Layoff Rumors

written by: •edited by: Linda Richter•updated: 9/18/2010

Often it falls to the HR department to sway company layoff rumors—and these types of rumors can roll from a snowflake to a full-blown snowball if not stopped. Dealing with these rumors (even if they’re true) can be tricky and should be handled with diplomacy.

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    Who’s Starting the Rumors?

    Rumors Can Start from Anyone With my background and experience in human resources and as a business owner, I can think of a few times when company layoff rumors floated around the office. These types of layoff rumors come from four sources:

    • Media – Even if you own a small business, the local media gain insights (true or untrue) from employees or vendors and suppliers: “They’re doing bad, they haven’t purchased any inventory, I think they’re going under," for example. These simple statements to a reporter-type can land you in the business section.
    • Access Employees – Often the trusted personal assistant that’s close to the president’s office hears things and may construe them to mean layoffs. One trip to the break room and rumors are abundant.
    • Complainers – Unfortunately complainers aren’t just entry-level or disgruntled employees. As the HR manager for one company in Phoenix, my assistant controller strolled around the office the day before each payday informing everyone that “we’ll never make payroll, we’re broke." I fought off quite the crowd when he did this so beware that any level employee can start company layoff rumors.
    • Troublemakers – Expect to employ one of these and this character trait may not present itself in the interview process. Whether the troublemaking employee’s problems stem from personal issues or company or co-worker issues, he will do everything in his power to start a rumor, even layoff rumors.

    Image Credit (MorgueFile)

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    Nip Rumors in the Bud

    Dealing with these 4 sources of company layoff rumors isn’t difficult, but often tricky if they aren’t nipped in the bud—and quickly. Throughout my HR and business owner career, I’ve dealt with each of these 4 rumor sources.

    • Media – As a business owner, an error was made at my bank and a transfer to payroll was missed. You guessed it—payday was not so delightful and I screamed at the bank president—a lot. One of the bank employees was married to a local news reporter and, indeed, my business not only received calls asking “Are you closing?" but also an unwanted tidbit appeared in the local press. Not only did I make the local newspaper retract the statement, the bank employee was terminated. You can handle these things quickly with phone calls to top people.
    • Access Employees – At a company where I was the HR manager, an assistant construction manager was pulled off a job—the reasons aren’t relevant, but the personal assistant to the CEO (with ear perched in the right direction) heard the CEO and construction manager discussing the employee. She in turn thought the project was going under and many would lose their jobs, and she told every co-worker she found. Access employees need to be trusted. If an access employee breaches this trust, replace him or her.
    • Complainers – Some people complain just to complain. They usually aren’t happy in their jobs and like rustling feathers and enjoy throwing company layoff rumors around. In my experience with the assistant controller who constantly told everyone the company would never meet payroll expenses, a nice chat with him was all that was needed. Often, talking with complainers in a calm way can make them see this character trait so they cease to use it.
    • Troublemakers – These people usually have more going on in their lives than anyone knows about—mostly problematic issues. Because they are miserable, they will use their powers to spread the word of company layoff rumors. Not only should these types of employees be spoken to directly, but as the HR manager or company owner, you should speak to supervisors and tell them to reassure their subordinates that these rumors aren’t true.
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    When the Rumors Are True

    Don't Leave Employees In the Dark Sometimes the company layoff rumors really are true and there will indeed be company layoffs. Your best bet here is to prepare first and don't keep your employees in the dark. Depending on the size of your company, you should know what employees expect if layoffs are announced. Amy Carson offers a great article from the employee’s view on company layoffs.

    The US Department of Labor offers tips on dealing with layoffs for employees in their Rapid Response Services for Employers and can direct you to the state agency in your area to assist you with layoff procedures and handling employee concerns. If you’re an HR manager or a business owner, it’s a good idea to stay abreast of laws governing layoffs including COBRA and Worker Adjustment & Retraining Notification (WARN) rights. You can download Department of Labor publications from their website regarding both of these issues.

    Keep in mind, when the rumors are true, it's best to handle employee concerns as quickly as you can.

    Image Credit (MorgueFile)






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