How Leaders Can Rebuild Trust After Layoffs

Key Takeaways:

• Layoffs deeply impact survivor trust (only 29% trust in Vietnam post-layoff) and productivity.
• Rebuilding requires transparent leadership, active listening, and tangible support.
• Investing in remaining employees’ growth and well-being is crucial for retention.
• How departing staff are treated significantly influences survivor morale.
• Vietnamese companies face unique sector challenges but can adopt global best practices.

Recent waves of layoffs, affecting hundreds of thousands in Vietnam across sectors like manufacturing and tech, have significantly eroded employee trust and engagement. Layoffs impact on employees for long-term performance and stability worldwide. Rebuilding this trust isn’t just about morale; it’s a strategic necessity for business recovery and sustainable growth, especially in competitive markets like Southeast Asia.

Why rebuilding trust is harder now

Rebuilding employee trust after layoffs has become significantly more challenging in today’s environment. Culture Amp’s research shows recovery time has increased from 12-18 months to 18-24 months, with some metrics never fully recovering. Understanding these challenges is the first step toward addressing them effectively:

• Extended recovery timeline: Morale recovery now takes up to two years, with organizational commitment continuing to decline over time for survivors. Quick fixes and simply waiting won’t heal these wounds.
• Survivor syndrome: Remaining employees experience guilt, stress, and burnout that directly affect productivity. Work cultures often devolve into mistrust and a cut-throat environment, undermining collaboration and innovation.
• Talent exodus risk: Layoffs often trigger voluntary departures among valuable employees with in-demand skills. Employees may leave for somewhere they feel a greater sense of safety… even those the company highly values. This secondary talent drain further compromises recovery efforts.
• Layoff fatigue: Multiple rounds of cuts devastate leadership credibility. Survivors become increasingly skeptical of reassurances, creating a perpetual state of anxiety where focus shifts from contributing to protecting personal interests.

Build trust through transparency and fairness

Effectively rebuilding trust requires intentional leadership strategies centered on honesty, equity, and compassion. These foundational elements help remaining employees process what happened and gradually recommit to the organization’s future.

Communicate constantly and honestly

Increasing communication frequency after layoffs is crucial for rebuilding trust. Even when you don’t have all the answers, transparency about what you know and don’t know is better than silence that breeds rumors.

Three critical communication practices that build trust:

1. Address speculation directly with facts rather than allowing rumors to spread
2. Provide clear statements about whether additional cuts are planned
3. Maintain regular updates even when there isn’t major news to report

If the downsizing is concluded, explicitly say so to help employees refocus on the future instead of fearing more reductions. Regular touchpoints from leadership help maintain an open dialogue during this sensitive period.

Ensure a clear and fair process

The perception of fairness significantly influences how survivors process layoffs. Use and communicate objective criteria for workforce reduction decisions, such as role redundancy or skill alignment with future needs. Harvard Business Review research indicates companies see better performance when “employees thought it was handled equitably and done for strategic reasons” rather than seeming arbitrary or political.

In Vietnam, involving HR and following legal consultation requirements with worker representatives is especially important. A comprehensive guide on terminating labor contracts provides essential insights on navigating these complex requirements. When employees understand that necessary cuts were made thoughtfully and fairly, they can more readily accept the changes and move forward.

Objective criteria for fair layoff decisions might include:

• Role redundancy due to organizational restructuring
• Business unit performance or strategic direction changes
• Skills alignment with future business needs
• Performance history (when properly documented)

Deliver layoff news with empathy

“If there is a decision to terminate an employee, employers need to inform and discuss with that person with mutual respect and empathy.” 

How departing employees are treated directly influences the trust and engagement of those who remain. Train managers to handle notification conversations respectfully, acknowledging individuals’ contributions and conducting these difficult conversations privately. Avoiding impersonal methods like mass emails or abrupt system access revocations demonstrates that you value people even during difficult transitions.

Learning how to lay off an employee with compassion and professionalism is essential for preserving organizational culture during difficult transitions. The way leadership handles these conversations sets the tone for how remaining employees will perceive the company’s values.

Show care and re-engage your remaining team

How you support both departing and remaining employees after layoffs sends powerful signals about your company’s values. Demonstrating genuine care helps rebuild the emotional connection that drives engagement and performance.

Provide strong support for departing employees

Generous severance packages and outplacement services not only help those leaving but significantly impact those staying. PwC’s survey found that 57% of employees say offering generous severance builds trust, while 53% say providing outplacement services does the same. These supports reassure the entire workforce that you value people even when business decisions necessitate difficult changes.

When possible, go beyond legal minimums with extended benefits, career counseling, or networking assistance. In Vietnam’s manufacturing sector, cases where companies provided additional compensation and re-employment services after initial resistance helped resolve labor disputes and preserve workplace harmony. These investments in departing employees’ futures also strengthen your employer brand and remaining team’s loyalty. Effective support elements for departing staff:

• Severance packages that exceed legal minimums when possible
• Extended health benefits for a transition period
• Outplacement services and career counseling
• Reference letters and networking assistance
• Exit interviews that allow for dignified closure

Actively re-engage your survivors

After layoffs, treat remaining staff as though they need re-onboarding into a changed organization. Hold town halls to share a positive path forward. Hold town halls to share a positive path forward—50% of employees say this builds trust, according to PwC research. These forums should outline the company’s strategy and emphasize how remaining team members are vital to its execution.

Create opportunities for two-way dialogue through listening sessions or surveys to gather input and concerns. Talentnet’s Employee Engagement Snapshot Survey can help identify engagement gaps and prioritize actions to rebuild morale. Additionally, managers should conduct individual check-ins with team members to reaffirm their value and discuss future opportunities. These personal conversations help employees see themselves in the company’s future rather than feeling like interchangeable resources.

Address survivor emotions proactively

“Employers must be aware of workplace survivor syndrome and create an emotion processing culture in which employees can identify what they’re experiencing… Whenever people feel trauma, being able to share it helps mitigate it.”

– Dr. Anthony Silard –

Acknowledge the emotional toll survivors experience, including stress, guilt, and anxiety about their own job security. Offering Employee Assistance Program counseling or creating forums for processing feelings, as LiveRamp did after its 10% workforce reduction, gives employees permission to acknowledge their emotions rather than suppressing them. This emotional processing prevents lingering anxiety from undermining productivity and engagement.

Invest in survivors to secure the future

Long-term trust rebuilding requires meaningful investment in your remaining team’s professional growth and wellbeing. These investments demonstrate your commitment to their future and the organization’s sustainable recovery.

Reinforce vision and values

Reconnect employees to your company’s core purpose beyond financial metrics. In times of uncertainty, people seek meaning and direction. Reiterating your mission and how remaining staff are essential to achieving it provides needed clarity and inspiration.

If mistakes were made during the layoff process, acknowledge them directly. This humility demonstrates integrity and helps rebuild credibility. Cultural activities that reinforce shared values and teamwork can help re-establish a sense of community among the reconfigured workforce, transitioning focus from what was lost to what can be built together.

Manage workloads and prevent burnout

After downsizing, redistribute tasks realistically rather than expecting fewer people to maintain the same output. Review priorities and be willing to delay or scale back some initiatives to prevent overwhelming your team. Acknowledge the additional effort required during this transition period and express genuine appreciation.

Monitor for signs of burnout, which often appears after layoffs as survivors take on expanded responsibilities while processing their own emotional reactions. Creating sustainable workloads shows respect for employees’ wellbeing and protects the human capital you’ll need for future growth.

Post-layoff workload management strategy:

1. Conduct a comprehensive review of all projects and priorities
2. Identify what must continue, what can be delayed, and what can be eliminated
3. Redistribute responsibilities based on skills and capacity, not just convenience
4. Set realistic timelines that acknowledge the transition period
5. Create feedback mechanisms to identify overload before burnout occurs

Invest in growth and well-being

Offering development opportunities signals your investment in survivors’ futures with the company. Training programs, stretch assignments, or mentoring relationships help employees see a path forward despite organizational changes. These growth investments counter the perception that the company is solely focused on cost-cutting.

Similarly, introducing flexibility or mental health support demonstrates care for employees’ holistic wellbeing. In Vietnam’s competitive job market, these investments help retain key talent who might otherwise be recruited away during the uncertainty following layoffs. When employees see you investing in them despite financial constraints, it reinforces that they are valued assets rather than expendable costs.

Leveraging expert HR consulting services can help you develop tailored strategies for supporting your remaining employees after a layoff. Professional guidance ensures your approach aligns with best practices while addressing your organization’s specific challenges.

The impact of layoffs on employees of the organization extends far beyond those who leave. Rebuilding trust requires focused leadership through transparency, fairness, and authentic care. Prioritize clear communication, demonstrate equity in your processes, and invest in your remaining team’s development. Tracking essential workforce planning metrics will help you monitor recovery progress. Remember, your remaining team’s engagement directly determines your organization’s ability to recover, innovate, and grow after downsizing.