Right-Sizing with Care: Layoffs, Furloughs, and Rehiring Best Practices

Layoffs, furloughs, and rehiring after downsizing are decisions that press on both the head and the heart.

Sarah Lockwood talks with Peggy Shell, the CEO of Creative Alignments, about the reality of leading a team through moments when survival means making choices no leader wants to make. Peggy shares how her company moved from furloughs to layoffs during an economic downturn and what it took to carry the weight of those decisions while still protecting the future of the business. How do you take care of the people who stay after you’ve had to let others go? How much truth should you share when your team is already anxious?

Peggy explains how transparency and steady communication built trust, even in the midst of layoffs, and why she chose approaches like covering health insurance, offering transition periods, and helping people find new roles. She also reflects on the uneasy process of hiring again after downsizing and the challenge of moving forward with confidence when past decisions still weigh heavy.

This episode encourages entrepreneurs to look closely at how layoffs, furloughs, and rehiring after downsizing affect more than just headcount. These moments test the culture of a company, the trust between leaders and their teams, and the resilience of a business when pressure hits. Peggy’s story shows how the choices a leader makes in these situations leave a lasting mark on both the people and the direction of the business.

Episode Breakdown:

00:00 Introduction and Initial Layoffs

02:16 Fear of Rehiring and Economic Uncertainty

05:31 Conscious Leadership and Transparency in Layoffs

08:01 Furloughs vs. Layoffs

10:09 Handling Layoffs with Compassion and Support

11:14 Retaining A Players and Addressing Survivor Guilt

14:17 Lessons Learned and Building a Stronger Business

16:21 Innovation and Reimagining Company Culture

17:12 Final Takeaways for Leaders

Links

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