A lack of control, unclear responsibilities and poor communication often make layoffs a risk for companies. Leonard Kluck, Senior Manager and Head of People & Change Excellence at Dr. Wieselhuber & Partner (W&P), shows why HR should take on a central leadership role in staff redundancy programs.
Executive Summary
Controlling personnel redundancy programs: Why HR must take control of the process
- The challenge: Personnel redundancy programs are often implemented without clear process management and coordinated communication. This leads to loss of trust, uncertainty and risks for the employer brand.
- The solution: HR takes control of the process and manages restructuring together with management, communications, legal departments and the works council.
- Your benefit: Clear responsibilities and consistent communication reduce process risks and help protect performance, culture and employer brand.
- Focus: Manage personnel redundancy programs, HR governance, restructuring, change management
In times of uncertainty and crises, many companies have to resort to cost-cutting measures. In most cases, these involve staff layoffs – but often with a lack of leadership, a lack of process responsibility and uncoordinated communication initiatives. This not only creates uncertainty among employees, but also lasting damage to performance, culture and the brand.
Cost reduction & staff redundancy programs as the new normal: A practical example
A family business in the process industry with headquarters in the DACH region has separated employees in several waves in recent years: firstly, the elimination of hundreds of jobs in production; At another location, the works council only found out about extensive reduction measures 24 hours before the official announcement.
A short time later, another group of employees was terminated via email – in this case it affected the aftersales area. The company justified the step with the realignment of customer service: The structure had become too complex and made it more difficult to implement its own quality standards. A new unit should be created in late summer for which the laid-off employees can apply again.
This case exemplifies a pattern that runs through many failed personnel redundancy programs.
The core problem: HR without process sovereignty
What went wrong in the example outlined is symptomatic of many staff redundancy programs: There is a lack of clear process governance in which HR takes on a strategic or tactical leadership role. Instead, HR is reduced to a pure executive function that acts primarily reactively.
The consequences are devastating: employees find out about their impending dismissal via radio, the works council or the media before official communication takes place. Anyone who learns second-hand about a measure that potentially threatens their existence inevitably loses trust.
This is exactly where stringent HR leadership would be required: to specifically retain talent, to carry the corporate culture through the change process and to design communication that provides orientation instead of increasing uncertainty.
The consequences: What a poorly managed layoff does to organizations and employees
Poorly managed change processes create massive ripple effects. Studies repeatedly show that change processes have an impact on employees’ health as well as their motivation and satisfaction at work. Those not affected also look for alternative jobs early on, as mistrust has a negative impact on their relationship with the employer.
Stepstone data from 2024 shows that for 23 percent of respondents, a team restructuring was the immediate trigger for a job change. At the same time, employees perceive the organization as less honest and trustworthy, which also affects the employer brand: studies show that brand strength drops by an average of 18 percent after the announcement of layoffs. This is a disastrous side effect for companies that rely on skilled workers in the “War for Talent”. The damage to the reputation of management is also significant.
Investors and customers observe how a company deals with employees during a crisis. Anyone who acts short-sightedly not only risks losing skilled workers, but also the trust in the company and its management as a whole. At the same time, it is a fact that in a restructuring environment, positive employee feedback can hardly be expected publicly. However, the number of deterring or disastrous voices can be reduced and fair, respectful treatment can be made visible.
The way forward: HR as a strategic orchestrator
One solution lies in a fundamental paradigm shift, which is currently becoming increasingly important. HR must be at the “table of strategic decision-makers” and take control of transformations in general and staff redundancy programs in particular. Three levers are crucial:
1. HR takes control of the process
HR acts on an equal footing with management and is involved in strategic considerations right from the start. While management sets the course, HR tactically and operationally translates these strategies into concrete, “usable” measures.
2. Integrated governance instead of silo mentality
A task force made up of management, HR, communications, the legal department and a resilient interface to the works council acts in concert from day one. Anyone who involves the works council early and seriously brings alternative solutions to the table earlier and creates a deeper understanding of planned measures. Even if interests differ, it is worth agreeing on the key points of communication together.
3. Stringent communication plan as a guideline
The right people receive the right information in the right ways at the right time. This determines whether the process is controlled and resistance is minimized. Managers are informed before employees and must be actively prepared for separation discussions. Transparency in the change process is not an option, but rather a central prerequisite for building and maintaining trust.
Conclusion: Cost reduction & staff redundancy programs are an HR task – or they fail
Personnel layoffs as part of cost-cutting programs rarely fail because of the decisions themselves, but rather because of a lack of clarity in management, a lack of coordination and inconsistent communication. If HR is not involved as a central actor, avoidable risks arise: process disruptions, uncertainty in the organization and a significant loss of trust. HR should take over the orchestration of the entire process – from planning to communication to the implementation of detailed HR concepts.
This ensures that necessary measures are not only implemented efficiently, but are also communicated consistently and supported by the organization. HR is therefore not a downstream implementer, but rather a decisive factor for actually effective and responsible change processes.
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