Leading through redundancies: how to make tough decisions without breaking trust

Redundancies are never just a business decision. They are personal. People don’t just lose a job—they lose stability, identity and sometimes their confidence. Get it wrong, and you will damage morale, trust and the company’s long-term reputation. Get it right, and while it will still be painful, you can maintain integrity and engagement.

So, how do you manage redundancies well? It starts with five key principles:

1. Tell the truth—people see through spin

The worst mistake a leader can make is to sugarcoat bad news. People appreciate honesty far more than vague corporate messaging.

If the company is struggling, say so. If the business is shifting direction, explain why. If there were no viable alternatives, acknowledge it. Employees may not like the decision, but they will respect transparency.

A global tech company once attempted to downplay its layoffs, pretending they were “strategic realignments” rather than cost-cutting measures. Employees weren’t fooled. Rumours spread, trust collapsed, and even those who stayed lost faith in leadership.

In contrast, another firm facing similar cuts took a direct approach. Leaders explained the reasons, addressed concerns openly and provided clear next steps. The result? Employees still disagreed with the decision, but they didn’t feel misled. Trust remained intact.

2. Reduce uncertainty—the silent morale killer

People can handle bad news. What they can’t handle is not knowing.

Uncertainty breeds fear, which spreads like wildfire. Who’s next? How long will this go on? Will my job be safe in six months? If leaders don’t communicate clearly, employees will fill in the gaps with worst-case scenarios.

A financial services firm once announced restructuring but refused to give details. For weeks, speculation ran rampant. Productivity collapsed, and by the time the actual redundancies were announced, some of their best talent had already left.

A better approach? A different company facing similar cuts set a clear timeline. They committed to weekly updates, even if the update was “we have nothing new to report.” This simple act of communication reassured employees that they weren’t being left in the dark.

3. Use the SCARF model—because redundancy feels personal

Losing a job isn’t just about income. It triggers deep psychological responses, which is why redundancy can feel personal—even when it isn’t.

David Rock’s SCARF model explains why:

• Status – “What does this mean for how people see me?”
• Certainty – “What happens next?”
• Autonomy – “Do I have any control over this?”
• Relatedness – “Am I still part of the team?”
• Fairness – “Was this process handled fairly?”

Redundancy hits all five. If leaders don’t manage this properly, emotions spiral and trust is destroyed.

If you manage this well you give people control over their exit.  Offer different notice period options and career coaching. Protect status by publicly recognising contributions.Ensured fairness by making the selection process transparent.

4. Control the narrative—or it will control you

If you don’t actively manage the redundancy story, gossip and speculation will fill the gaps. And let’s be honest—people rarely assume the best.

One company made 200 people redundant without clear communication. Within days, LinkedIn was flooded with bitter posts, employees were calling journalists, and customers were asking if they were about to go under. The damage to their employer brand took years to repair.

You can take a proactive approach. Acknowledge the situation early, give employees and customers a clear, consistent message, and equip managers with the right language to handle difficult conversations. The difference? No chaos, no mass panic—just a difficult but well-managed process.

5. Don’t forget the stayers—they need you too

When redundancies happen, leaders tend to focus on those leaving. And that’s right. But it’s only half the job.

The people left behind—the ‘survivors’—have their own challenges. They feel guilty. They worry they might be next. They often face increased workloads with fewer colleagues to lean on. If you don’t support them, they will disengage, check out or leave.

A global manufacturing firm learned this the hard way. After a major restructure, they focused so much on exit packages for those made redundant that they neglected the remaining team. Within months, voluntary turnover surged because people felt abandoned.

Redundancy doesn’t just affect those leaving. If you fail to look after the stayers, you risk losing them too.

Final thought: do the hard things well

Redundancies are tough, but poor leadership makes them even tougher. Telling the truth, reducing uncertainty, addressing the psychological impact, controlling the narrative and supporting those who stay—these are what separate great leaders from mediocre ones.

It’s not about making people happy. It’s about handling difficult moments with integrity, empathy and professionalism.