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Prof.Dr.Aung Tun Thet Based on “You’ve Worked Hard to Earn Your Team’s Trust. What
8/3/2020 Happens If Layoffs Are Necessary?”, by Kent Grayson and Sanjay
Khosla, Kellog Insight July 6, 2020
LAYOFFS

• Brutal
• Easier to accept from leaders who consistently display
honesty, competency, and concern for employees

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LAYOFFS

• Sucks
• For person
• Being laid off
• Delivering bad news

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LAYOFFS

• More difficult for leaders who establis trusting

relationship with employees
• Whether building trust with employees liability during
challenging times

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TRUST

• Asset when delivering bad news to employees

• Loyalty engendered makes it easier for employees to
accept tough workforce decisions

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LEADERS

• When laying off valued team members

• Preserve as much trust as possible
• With employees who are leaving and with rest of
team

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GENUINE TRUST

• Built on 3 cornerstones:
1. Benevolence or genuine concern for fair treatment
and well-being of others
2. Honesty or commitment to telling truth and
keeping promises
3. Competence or knowledge of skills required and
ability to meet or exceed expectations
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BENEVOLENCE

• Important foundation for trust

• Mistakenly believe delivering bad news automatically
undermines benevolence
• Minimize backlash if decision made after genuine and
fair-minded consideration of impact

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REPUTATION OF TRUSTWORTHINESS

• Understand you honestly have no other choice

• Making difficult decisions to competently keep
company afloat

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REPUTATION OF TRUSTWORTHINESS
• Airbnb sent widely praised memo to employees
• CEO and cofounder Brian Chesky announced layoffs of
25% of workforce
• Announcement played well despite delivering bad news
• Transparently described challenges and relevant
solutions
• Reinforced perceptions of honesty, competence and trust
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BENEFITS OF EXPRESSING CONCERN

• Maintain benevolence while delivering bad news

• Express genuine personal concern for bad news
• Chesky wrote, “For a company like us, whose mission is
centered around belonging,
• this is incredibly difficult to confront, and it will be even
harder for those who have to leave Airbnb.”
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FAIR-MINDEDNESS AND CONCERN

• Communications accompanied by actions

• Mitigate pain
• Not let others bear brunt of actions
• Honest

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EMPLOYEES

• Know leaders can be trusted

• More likely to accept layoffs and furloughs
• When business conditions improve valued employees
eager to return!

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